US defence firm Covenant plans missile production in Germany, sources say

By Markus Wacket

BERLIN, Aug 28 (Reuters) - U.S. defence company Covenant plans to begin producing intermediate-range missiles near Leipzig from 2027, sources told Reuters on Friday, as Germany searches for affordable cruise missiles that can be deployed in large numbers.

The missiles would have a range of more than 1,500 kilometres and production capacity could reach up to 1,000 units a year, the sources said.

While Covenant is a U.S. company, most components for the planned production are expected to be sourced from Germany and other European countries, they added.

Covenant and Germany's defence ministry declined to comment.

The project comes as Berlin looks for less costly, domestically and European-supplied options to complement more expensive long-range weapons systems and close what officials see as a capability gap.

The search for alternatives had gained urgency after the United States, despite earlier announcements, no longer plans to provide Germany with Tomahawk cruise missiles, the sources said, triggering a search for alternatives.

(Reporting by Markus Wacket, writing by Maria Martinez, Editing by Louise Heavens)