Rheinmetall, 4iG, HM El to set up joint venture in Hungary

Deals

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Rheinmetall (51%), 4iG (39%), and HM EI (10%) have signed a preliminary agreement to establish a joint venture, aiming to participate in the digitalization of the Hungarian Armed Forces, according to a press release sent to the Budapest Business Journal.

According to the preliminary agreement, the company is expected to start operations in the second half of 2022 and will be established to develop and sell digitalization solutions, land and airborne simulation systems for the provision of soldier training within all combat areas, and command levels and equipment based on C4ISTAR capabilities.

Rheinmetall will act as a technology provider for components, products, military capabilities, and know-how (military simulation training, command, and control systems). The expertise of HM EI covers defense IT and infrastructure services, tactical combat management, and systems integration. 4iG will support the work of the joint venture with its strong IT and telecommunications background, cyber defense and development expertise, and its own significant infrastructure and capabilities to provide the appropriate software development environment.

Armin Papperger, CEO of Rheinmetall. says, “The joint venture, majority-owned by Rheinmetall, will be an integral part of our future digitalization strategy for the defense industry. The main objective of the cooperation is to support the strategic efforts of Hungary and the Central and Eastern European countries in the digitization of their armed forces and the achievement of the highest level of NATO compatibility. The location of the company also represents our special commitment to Hungary as a business location.”

Gellért Jászai, chairman and CEO of 4iG, notes, “The creation of the joint venture marks another milestone for 4iG. Thanks to the partnership with Rheinmetall, we are able to strategically enter a new business area, the technology and digitalization part of the defense industry. The cooperation will also greatly support our international market entry and sales activities. The cooperation will facilitate technology and knowledge transfer between the companies, and the jointly developed military solutions could play a key role in attracting further development and manufacturing capacities to Hungary in the future. In developing the joint company's products, we also rely on the decades of expertise of HM EI to serve the specific military needs in line with regional requirements.”

“The joint venture, led by Rheinmetall, will bring a number of benefits to Hungary and the companies involved in the project. The establishment of the company will bring one of the world’s leading defense digitization developments to Hungary, making the development of the Hungarian defense industry unique in our region. In addition, the systems and similar development competencies existing at HM EI will be able to connect to international defense markets much more easily thanks to the cooperation," points out Gáspár Maróth, President of HM EI and National Armaments Director.

"With the joint platform company, we are creating a protected industrial and knowledge base of the most modern IT-based command and control technologies in our country, which is of strategic importance from a defense perspective due to the geopolitical situation," he adds.

Rheinmetall and 4iG Plc signed an agreement in January 2022, whereby the Düsseldorf-based defense industrial company acquired a 25% stake in the Budapest-based info-communications company. The parties agreed not only to make a financial investment but also to lay the foundations for a long-term professional cooperation by acquiring the stake and raising capital.

 

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