German cartel office backs defence venture with Norwegian arms giant

Germany's Federal Cartel Office on Tuesday approved a joint project between Norwegian defence company Nammo Raufoss and German missile manufacturer Diehl Defence for the production of artillery ammunition.

The move provides competition for German arms giant Rheinmetall, which is the leader in the market.

The project offers Nammo a chance to begin producing 155-millimetre shells in Germany with Diehl Defence, which is based in Überlingen on Lake Constance.

While the company has only manufactured artillery shells on a small scale to date, it will be able to achieve a significantly higher level of production with Nammo's backing.

The two firms jointly won a tender for a major contract from the Bundeswehr, Germany's military.

In order for the contract to be executed, the joint venture had to be established and seek approval from the Bonn-based cartel office.

Diehl would not have been able to carry out the contract on its own, said Andreas Mundt, head of the cartel office.

"Nammo developed the ammunition ordered by the German Armed Forces and holds the intellectual property rights to it. Diehl's cooperation with Nammo therefore does not restrict competition," he added.

The cooperation between Diehl and Nammo creates effective competition in Germany, Mundt said.