Rheinmetall has agreed to buy US military vehicle parts maker Loc Performance in a $950mn deal, as Germany’s biggest defence contractor eyes contracts worth billions of dollars with the world’s largest army.

The Düsseldorf-based company said the deal would expand its business with the US military, helping it target “high-volume major orders for US army vehicle programmes” potentially worth more than $60bn. Michigan-based Loc makes parts including track systems and road wheels for combat vehicles.

Rheinmetall has been one of Europe’s biggest beneficiaries of a jump in German defence spending since the start of the Ukraine war, with the group’s share price surging about sixfold since 2022 as western nations have mobilised their armies. It is now seeking to carve out a larger share of the highly consolidated US defence market.