Israel Completes $6.5 Billion Arrow 3 Agreement With Germany, the Largest in Its History
Israel Aerospace Industries (IAI) said Monday that it has signed a new contract worth roughly 3.1 billion USD with Israel’s Ministry of Defense to expand Germany’s planned purchase of the Arrow 3 missile defense system. The agreement, finalized after Berlin and Jerusalem completed arrangements in December, brings the total value of the Arrow 3 package to more than 6.5 billion USD—the largest defense export deal in Israel’s history.
IAI described the add-on agreement as a major step in strengthening Germany’s long-range air and missile defense capabilities at a time of growing demand for proven intercept systems. Arrow 3, jointly developed by IAI, the Defense Ministry’s Homa Directorate and the US Missile Defense Agency, is designed to intercept ballistic threats outside the atmosphere.
Boaz Levy, IAI’s president and CEO, said the expansion reflects Germany’s confidence in Israeli technology and signals deeper strategic cooperation between the two countries. “This follow-on contract with Germany, expanding the procurement of the Arrow 3 system, represents another mega deal for Israel Aerospace Industries and for the State of Israel,” he said. Levy added that the agreement highlights “the strategic partnership between our two countries” and the shared commitment to protect civilian populations from emerging threats.
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Levy emphasized that the deal commits IAI to deliver an operationally tested system on a demanding timetable. He noted that the partnership with the Defense Ministry’s Homa Directorate, the German Defense Ministry and the US Missile Defense Agency played a central role in reaching the expanded agreement.
Israeli officials say the full Arrow 3 package will reinforce both countries’ defensive architecture. For Germany, it forms the core of its long-range missile shield, while for Israel the arrangement deepens military-industrial cooperation with a key European ally and expands the international deployment of one of its most advanced systems.
IAI serves as the program’s prime contractor, responsible for development and production. The Defense Ministry said additional work will focus on supporting integration, delivery schedules, and preparations for long-term maintenance.
Officials expect implementation to begin immediately, with coordination continuing among Israel, Germany and US partners as the project moves into its next phase.
