Deutz AG (DEUZF), a Cologne-based engine maker historically focused on construction and agricultural vehicles, has agreed to acquire FFG Flensburger Fahrzeugbau Gesellschaft mbH, a privately held German producer of military and armored vehicles, for 1.6 billion as it moves deeper into Europe's expanding defense market. The transaction includes about 1 billion in debt-funded cash and roughly 0.6 billion in Deutz shares issued to FFG's seller families, giving the company a larger platform in a sector supported by Europe's rearmament push.
Chief Executive Officer Sebastian Schulte said the acquisition is expected to drive a significant increase in revenue over the next couple of years, while defense could become Deutz's largest profit contributor and either its biggest or second-biggest revenue source. Investors initially responded positively, with Deutz shares rising as much as 10.2% in early Frankfurt trading, the biggest move since April, before giving back most of the gain.
FFG reported 760 million in 2025 revenue, employs more than 1,100 people, operates two sites in Flensburg, and is building a third location. NATO member states represent 90% of FFG's customers, while its order backlog stands at about 1.9 billion, and Deutz now expects to reach its 2030 targets of 4 billion in sales and a 10% Ebit margin ahead of schedule.