Overview
- The defence ministry announced on June 24 that it will not press ahead with building six F126 frigates and instead proposes buying eight MEKO A-200-DEU frigates from ThyssenKrupp Marine Systems, subject to Bundestag budget approval.
- The ministry said repeated schedule slippages, software and documentation problems under the original contractor Damen (DSNS) and the high price of transferring the program to Rheinmetall/NVL made the F126 unsustainable.
- Berlin estimates the first four MEKO frigates would cost about €6.3 billion with an option for four more at roughly €5.3 billion, while a ministry review found continuing the F126 under a new contractor could push total costs above €18 billion.
- Markets reacted immediately: Rheinmetall shares plunged (about 15–17%) after losing access to a potential €12–12.8 billion contract, TKMS shares rose around 9–10% as the likely MEKO supplier, and roughly €2 billion of prior F126 spending is expected to be written off.
- The cancellation exposes wider procurement risks for Germany’s rearmament drive, raises a legal review of possible damages against DSNS, and shifts NATO anti-submarine planning toward quicker, proven frigate deliveries rather than a bespoke, higher-risk design.