An “era of rearmament” is under way in Europe, declared Armin Papperger, the boss of Rheinmetall, earlier this year. Investors in Germany’s defence champion certainly seem to think so. Since the start of the year its market value has rocketed from €27bn ($31bn) to €80bn, equivalent to 90 times its annual net profit and within shooting distance of Lockheed Martin, an American defence colossus. The values of other large European defence contractors, including Britain’s BAE Systems, France’s Thales and Italy’s Leonardo, have also soared (see chart 1).
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