Israel and Germany have signed a new defense contract worth approximately $3.1 billion to further expand Germany’s Arrow-3 air and missile defense capabilities, the Israeli Ministry of Defense confirmed. The agreement represents the next phase of a rapidly deepening bilateral defense partnership and supports Berlin’s accelerated efforts to reinforce national and European missile defense amid rising security threats across the continent.
According to the Israeli Ministry of Defense, the new contract builds on the initial Arrow-3 agreement signed in November 2023, which marked the system’s first-ever export and positioned Germany as a cornerstone participant in the European Sky Shield Initiative. That earlier deal, valued at roughly $4 billion and approved by the U.S. government, remains the largest defense export in Israel’s history and includes procurement, system integration, and initial operational deployment. Deliveries under the original agreement are scheduled to begin in 2025, reflecting Germany’s shift toward long-range ballistic missile interception as a core defense priority.
The newly announced contract expands the original scope by covering additional Arrow-3 system components, enhanced interceptor availability, extended operational coverage, and long-term sustainment. Israeli officials stated that the expanded package will support large-scale deployment, upgraded command-and-control integration, and sustained readiness over the coming decades. As the uppermost layer of Israel’s multi-tier missile defense architecture, Arrow-3 is designed to intercept ballistic missiles outside the Earth’s atmosphere using hit-to-kill technology, neutralizing threats during the midcourse phase of flight. The system is developed by Israel Aerospace Industries’ MLM Division in cooperation with the U.S. Missile Defense Agency.
