Germany scraps €18B frigate deal with Dutch shipbuilder Damen

The German government has scrapped plans to build six frigates, according to the Ministry of Defense. The six F126 frigates were originally supposed to be built by Dutch shipbuilder Damen, but the project ran into substantial delays and rising costs.

Instead, Berlin is working on a revised procurement strategy that would see the acquisition of eight naval vessels from German shipbuilder ThyssenKrupp Marine Systems. As a result, the German government opted to hand over the role of prime contractor to German defense firm Rheinmetall, a change that was expected to take effect this summer.

Damen is encountering major difficulties across several defence programmes. The delivery of four anti-submarine warfare frigates for the Dutch and Belgian navies has been delayed by years, while costs have reportedly at least doubled. In a recent parliamentary debate, State Secretary for Defence Derk Boswijk (CDA) referred to the situation as a “serious concern.”

The original plan to build six frigates was estimated at around 18 billion euros. The German government has now opted for a revised procurement, selecting eight MEKO A-200 DEU vessels from ThyssenKrupp Marine Systems for a total cost of approximately 11.6 billion euros. The class is already in operational service with multiple navies worldwide.

Shares of Rheinmetall dropped sharply in Frankfurt, losing around 17 percent after expectations that it would take on the frigate construction project were not met. At the same time, rival shipbuilder ThyssenKrupp Marine Systems saw its stock rise by more than 12 percent.

The implications for Damen remain uncertain at this stage. A spokesperson for the company said it would not comment on any potential consequences of the decision.

The Ministry of Defense said it has taken note of the German decision. “We will now examine what the possible consequences are for the Netherlands.” Damen remains an important supplier for the ministry, according to a spokesperson. The shipbuilder plays a central role in the renewal of the Dutch fleet.

In a statement to Reuters, ThyssenKrupp Marine Systems said it welcomes the opportunity to support the strengthening of the German navy. The company noted that preliminary work started as early as February and that delivery of the first MEKO A-200 frigate is planned for 2029.