Germany's regulatory agency approved on Sept. 28 the plans of the arms manufacturer Rheinmetall to set up a joint venture in Kyiv together with the Ukrainian Defense Industry, Ukraine's state-owned defense company.
This new enterprise will provide "maintenance, assembly, production, and development of military vehicles" and initially operate exclusively on the territory of Ukraine, the German Federal Cartel Office said.
"The defense industry is in flux given the geopolitical situation," said Andreas Mundt, the agency's president.
"This project will not result in any competitive overlaps in Germany. We gave our approval quickly."
Rheinmetall said that the first steps in the cooperation will focus on the maintenance and repair of vehicles transferred to Ukraine as part of Germany's multilateral "Ringtausch" equipment exchange program.
Under this scheme, European allies are providing Ukraine with older Soviet equipment in exchange for German armaments.
As the next step, Rheinmetall wants to manufacture select products in Ukraine and even develop military systems by joint German-Ukrainian specialist teams further in the future.
In May, the German arms manufacturer presented plans to set up a joint venture with Ukraine's state defense contractor to produce Fuchs armored personnel carriers. Later in the summer, Rheinmetall said it wanted to open an armored vehicle plant on Ukrainian territory.