By Matthias Inverardi and Miranda Murray
DUESSELDORF, Germany (Reuters) -Auterion CEO Lorenz Meier said having German defence player Rheinmetall on board as a “significant” shareholder in the U.S.-based drone software firm would help it grow its order book, adding that it would not lead to a full takeover.
Auterion already provides software for some Rheinmetall drones and the direct investment, which was announced this week, is a way to strengthen collaboration, Meier told Reuters.
He did not disclose the exact size of Rheinmetall’s stake, which while “significant”, was not a blocking minority.
“We’re incredibly pleased with this honour, especially in the German market,” said Meier, adding that closer ties between the two firms could help Auterion win more contracts.
STRONG COLLABORATION, NOT TAKEOVER
Rheinmetall CEO Armin Papperger told analysts on Tuesday that the defence firm had bought Auterion shares, without giving any additional details.
Meier said Rheinmetall, which sees mergers and acquisitions as key to rapidly expanding its business to meet demand, is not aiming for a takeover with the move and Auterion is capable of remaining independent for another 30 years.
Auterion is currently exploring the market for more software functions to acquire, he added.
ORDER BOOKS EXPECTED TO KEEP GROWING
Rheinmetall and Auterion, which signed a long-term cooperation agreement in December 2024, are working together on drone components with the goal of creating an industry standard for controlling and operating them in various environments.
Auterion was founded in 2018 and became profitable this year. It has annual revenue of around 100 million euros ($115 million) and 160 employees, both of which Meier expects to grow.
Meier said Auterion is providing software for the drones built by Rheinmetall to fulfil orders for loitering munitions, which hover over targets before striking.
Auterion, whose customers already include the U.S. and Ukraine, as well as the Netherlands, Britain and Taiwan, expects to win an order from Germany after demonstrating a drone swarm control system three months ago, Meier said.
Rheinmetall plans to restructure from next year to reflect changed priorities, including a new air defence unit with mid-term sales potential of 3 billion euros to 4 billion euros.
Its CEO Papperger said demand is mainly being driven by European interest in the face of repeated drone incursions.
($1 = 0.8680 euros)
(Reporting by Matthias Inverardi and Miranda Murray; Editing by Alexander Smith)
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