Rheinmetall, a German defense contractor, and Iceye, a Finnish SAR constellation operator, are collaborating to build synthetic aperture radar (SAR) satellites. A joint venture, with Rheinmetall holding 60% ownership, will establish a satellite production facility in Neuss, Germany. The deal, announced on May 8th, awaits final agreements and regulatory approvals. Financial details remain undisclosed.
“With the establishment of the new joint venture, we are making further inroads into the space domain,” Rheinmetall CEO Armin Papperger said. “We are thus not only responding to the increased demand for space-based reconnaissance capabilities among armed and security forces worldwide, but also contributing to the preservation and expansion of Germany as a centre of technology.”
This partnership comes amidst a surge in global military spending. The Stockholm International Peace Research Institute (SIPRI) reports a record $2.7 trillion in 2024, a 9.4% increase. Germany’s military expenditure rose significantly, reaching $88.5 billion—making it the largest spender in Western Europe.
Walther Pelzer, head of Germany’s space agency DLR, highlighted the importance of space for infrastructure and security, stating, “This is the reason that I expect that space will become part of this cake.” He anticipates increased spending will boost Germany's role within the EU and internationally. This is further supported by the European Commission’s plan to allocate up to 800 billion euros to enhance the region’s defense capabilities, with a substantial portion for space.
SIPRI researcher Lorenzo Scarazzato observes, “The latest policies adopted in Germany and many other European countries suggest that Europe has entered a period of high and increasing military spending that is likely to continue for the foreseeable future.”
The joint venture signifies a growth in the Rheinmetall and Iceye partnership. Production is slated to begin before June 2026, with potential expansion into other space-based capabilities. Papperger projects annual sales could reach 1 billion euros, although a timeline is unspecified. Iceye, founded in 2014, operates a large SAR constellation, providing imagery to government and commercial clients.