The Israeli Ministry of Defense has announced a new defence contract with Germany valued at approximately $3.1 billion, expanding Berlin’s acquisition of the Arrow-3 air and missile defence system.
The agreement builds upon earlier cooperation between the two countries and underscores Germany’s intensified efforts to reinforce its air and missile defence posture amid growing security challenges in Europe. Israeli officials stated that the contract extends the Arrow-3 agreement signed in November 2023, which marked the first export of the exo-atmospheric interceptor and positioned Germany as a cornerstone of the European Sky Shield Initiative.
Germany’s initial Arrow-3 procurement, completed in late 2023 following U.S. approval, was estimated at around $4 billion and remains the largest defence export deal in Israel’s history. That agreement included the acquisition, system integration, and initial deployment of Arrow-3 for German air defence, reflecting a strategic pivot toward long-range ballistic missile interception. Deliveries were scheduled to begin in 2025.
As part of the programme’s implementation, Israel delivered the first operational Arrow-3 system to Germany during a ceremony held at a German Air Force base near Berlin. The Ministry of Defense noted that the delivery represented a major milestone in executing the export contract signed nearly two years earlier and marked concrete progress toward operational capability. The handover included key system components to support early integration into Germany’s air defence architecture.
The newly concluded $3.1 billion follow-on contract expands the original programme to include additional system components, wider coverage, and long-term sustainment arrangements. The expanded scope is intended to support large-scale deployment of Arrow-3, ensuring sufficient interceptor availability, improved command-and-control integration, and enduring readiness over the coming decades.
Arrow-3 forms the highest tier of Israel’s layered missile defence system and is designed to intercept ballistic missiles in space using a kinetic hit-to-kill interceptor. By neutralising threats during the midcourse phase, the system prevents atmospheric re-entry, significantly reducing the risk of collateral damage over protected areas. The system is developed by Israel Aerospace Industries through its MLM Division, in close partnership with the U.S. Missile Defense Agency.
