DUSSELDORF, Aug 13 (Reuters) - Rheinmetall

will take over U.S. military vehicle supplier Loc Performance in

a $950 million deal, the German defence group said, with an eye

to improving its chances of scoring orders worth billions.

"The acquisition expands the Group's business with the U.S.

military, increases its industrial base in the U.S. and creates

further access for its technologies in North America," it said.

Shares in Rheinmetall were up 1% on 0705 GMT on Wednesday

after the deal was first announced on Tuesday evening.

Loc, with about 1,000 employees, operates plants in the

states of Michigan and Ohio, where it manufactures vehicle and

armour products for civilian and military customers.

It said it makes drivetrains, suspensions, track systems,

rubber products, armour products and fabricated structures for

vehicles.

Chief Executive Armin Papperger, reportedly the target of a

Russian assassination attempt, has repeatedly made clear that he

has high hopes for the U.S. market and is planning acquisitions.

Rheinmetall already has factories in the United States and

also cooperates with the U.S. company Lockheed Martin ( LMT ).

In particular, it expects the takeover to give it an edge in

competing for two major U.S. military contracts: the XM30

infantry fighting vehicle (IFV) programme and the CTT project.

Loc Performance's current manufacturing capabilities can

meet the programmes' critical production requirements, it said.

Rheinmetall is one of two participants in the prototype

phase of the XM30 programme to build a new generation of tanks

as the successor to the Bradley IFV, with an estimated volume of

around 45 billion euros ($50 billion) for some 4,000 vehicles.

It is also participating in the Common Tactical Truck (CTT)

programme for 40,000 military trucks worth around $16 billion.

($1 = 0.9090 euros)