Defense - Korea: Historic LIG-Rheinmetall JV

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Defense - Korea: Historic LIG-Rheinmetall JV

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Defense - Korea

Historic LIG-Rheinmetall JV

Industry Overview

Breaking News 16 June 2026

Equity• LIG D&A and Rheinmetall to form strategic partnership to provide air defense systems

Republic Of Korea

for the NATO Defense

• More partnerships including Hanwha Aerospace's MCS local production in Germany/US

etc. to follow KJ Hwang >> Research Analyst

Merrill Lynch (Seoul)• We see export mix diversification to Western Europe and North America as valuation +82 2 3707 0460

rerating catalyst kj.hwang@bofa.com

Dongho Shin >>

Research Analyst

Merrill Lynch (Seoul)Korea's MSAM/LSAM debut in NATO underway dongho.shin@bofa.com

LIG D&A and Rheinmetall announced plans to establish a new strategic partnership to

produce and supply South Korea's medium-and long-range surface-to-air missile

interceptors (MSAM/LSAM) in NATO and Europe. LIG's localization of PGM business will NATO: North Atlantic Treaty Organization

be supplementary to Rheinmetall's current short-range air defense capabilities. MCS: Modular charge system

MSAM: Medium range surface to air missile

Rising awareness on multi-layered air defense LSAM: Long range surface to air missile

This new partnership in our view is an outcome of growing awareness on multi-layered PGM: Precision guided missile

air defense against asymmetric warfare (evolving threats) and drained interceptor DM: Developed market

inventories globally. At the initial stage of alliance in Germany, we expect LIG D&A to

rely on its existing supply chain by sourcing key components and materials etc. from

South Korea.

DM expansion set to prompt valuation rerating

Looking ahead, we see wider defense partnership potentials between South Korea and

Western Europe (e.g.