From National Champions to European Heavyweights

The Development of European Defense Industrial Capabilities Across Market Segments

by Katia Vlachos-Dengler


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Driven by dramatically reduced defense budgets and spiraling costs of weapons systems, defense firms on both sides of the Atlantic are seeking increased access to each other’s markets through collaborative ventures, teaming arrangements, or outright acquisitions. This book summarizes RAND’s research on the current structure of the European defense market, focusing on the five countries with the largest defense industries in Europe: the United Kingdom, France, Germany, Italy, and Spain. It examines key market segments and identifies major industrial players in each segment as well as significant market trends. The author finds that consolidation in the European defense market has led to the emergence of three dominant industrial players, each with its own distinct growth strategy. But while European firms have become more visibly competitive in the world defense market, they lag U.S. companies in overall size and U.S. firms seem to dominate sales in all defense market segments except land systems. Key concerns currently facing the European defense market include the future of intra-European and transatlantic consolidation, the ability of European players to successfully integrate their acquisitions, and the strength of government demand (and budgets) for defense goods.

Table of Contents

  • Preface

  • Summary

  • Acknowledgements


  • Overview

  • Part I

    Industry Overview: A Complex Structure with Three Shapers

  • Part II.A

    European Market Players: Platforms

  • Part II.B

    European Market Players: Subsystems

  • Part III

    Analysis of Key European Market Defense Drivers

  • Part IV

    Directions for Follow-On Research on the European Defense Market

  • Appendix A

    European Defense Market Overview

  • Appendix B

    Major European Players and Their Ownership Structure

  • Appendix C

    Examples of Transatlantic Relationships

  • Bibliography

The research described in this report was performed under the auspices of RAND's National Security Research Division.

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