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German govt source says KMW, Nexter tie-up makes sense
July 2, 2014 / 7:46 AM / 3 years ago

German govt source says KMW, Nexter tie-up makes sense

BERLIN, July 2 (Reuters) - A German government source said on Wednesday, in reaction to news that French arms maker Nexter and Germany’s Krauss-Maffei Wegmann (KMW) have entered exclusive talks about a tie-up, that European co-operation in the defence industry made sense.

Such a merger would create Europe’s largest producer of ground armaments such as tanks, as both struggle to cope with military budget cuts and reduced defence spending.

The source added that such a merger would not automatically enable Krauss-Maffei Wegmann to bypass German weapons export controls, which Economy Minister Sigmar Gabriel intends to apply more stringently following a sharp rise in exports to Gulf states and non-allied countries in recent years. (Reporting by Gernot Heller; Writing by Alexandra Hudson; Editing by Stephen Brown)

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