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Rheinmetall stake strengthens collaboration, says Auterion

CEO

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Auterion expects order book growth with Rheinmetall

support

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Drone software firm's customers include US, Ukraine, UK

By Matthias Inverardi and Miranda Murray

DUESSELDORF, Germany, Nov 20 (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)