BERLIN, Aug 27 (Reuters) -

European defence giant Rheinmetall has signalled

interest in taking over German shipbuilder Naval Vessels

Luerssen, industry sources told Reuters on Wednesday, as the

Duesseldorf-based firm looks to expand into the naval business.

According to the Bild newspaper, which first reported

Rheinmetall's plans, the supervisory board intends to consider

the purchase in the coming weeks.

According to Bild, the Luerssen family, who own the

shipbuilder, plan to divest its military shipyards in Hamburg,

Wilhelmshaven and Wolgast to focus on building megayachts.

The privately owned NVL is a leading naval ship

manufacturer, alongside Thyssenkrupp's warship division TKMS,

with annual sales of 1 billion euros ($1.17 billion), Bild

reported.

A person familiar with the matter was cited by the newspaper

as saying that any acquisition could still fall through as the

Luerssen family would need to approve it.

When asked about the Bild report, Rheinmetall CEO Armin

Papperger told reporters that the company was always interested

in expanding its product portfolio, without giving further

details.

Papperger said earlier this month that Rheinmetall, which

makes tanks and ammunition, was in talks with partners about

investing in the naval sector.

A NVL spokesperson said on Thursday that the company does

not comment publicly on speculation and would not provide

further information about the matter.

Rheinmetall is one of the biggest beneficiaries of Europe's

push to upgrade its defence capabilities following Russia's

invasion of Ukraine.

Separately, Dennis Goege, the European head of U.S. defence

contractor Lockheed Martin ( LMT ), told WirtschaftsWoche that

the company was in discussions to have Rheinmetall manufacture

missiles including ATACMS and Hellfire types at its expanding

Unterluess site in northern Germany.

The two companies said in April that they would expand their

cooperation beyond a memorandum of understanding signed in 2024,

with Lockheed providing missile and rocket technology, and

Rheinmetall manufacturing and selling missiles in Europe.

Goege said that the final list of missiles had yet to be

determined.

Rheinmetall, which this year started making fuselage parts

for Lockheed's F-35 fighter jets, declined to comment on the

report.

Also on Wednesday, Papperger signed a contract to build a

powder factory in Romania, worth around half a billion euros,

following on from Tuesday's announcement that Rheinmetall

planned to produce gunpowder and 155-mm artillery shells in

Bulgaria under two joint venture agreements.

($1 = 0.8542 euros)

(Additional reporting by Miranda Murray and Ludwig Burger;

editing by Thomas Seythal, Kirsten Donovan and Louise Heavens)