Rheinmetall looks to oil states for new tank buyers - paper
FRANKFURT, Sept 26
FRANKFURT, Sept 26 (Reuters) - Germany's Rheinmetall , an auto parts and military equipment manufacturer, is looking to branch into oil and gas services to gain access to new customers for its defence business at a time when European countries are slashing budgets.
Chief Executive Armin Papperger told German newspaper Handelsblatt the company would form a joint venture with the petrochemical services unit of Ferrostaal, with estimated sales of 200-300 million euros ($270-$405 million), and would aim later to acquire a majority.
Rheinmetall, which builds the Leopard II battle tank, is hoping to win new service contracts with governments in major oil-producing states in South America and the Middle East and eventually sell weapons to the governments.
"We gain access to the decision makers through the Ferrostaal unit 'Oil & Gas'," Papperger said in an interview published on Thursday in the business daily.
"The contacts on the political side are often identical - our business is based on contacts, and building them up takes years. It will go faster with the joint venture."
The business model is reminiscent of that of U.S. company Halliburton, the world's second-largest oilfield services provider, whose former unit KBR is a defence contractor that has done work for the U.S. government.
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