IAI Signs $3.1 Billion Follow-On Contract for Germany’s Arrow 3 Missile Defense Program

Israel Aerospace Industries (IAI) announced the signing of a new contract worth around $3.1 billion with Israel’s Ministry of Defense to advance Germany’s acquisition of the Arrow 3 air and missile defense system. The contract follows a government-to-government agreement concluded in mid-December between Israel and the German Federal Ministry of Defense.

According to the company, the follow-on agreement expands the scope of Germany’s Arrow 3 procurement and brings the cumulative value of the program to more than $6.5 billion. This level makes the Arrow 3 sale the largest defense export deal in Israel’s history and a cornerstone of Germany’s emerging long-range missile defense architecture.

IAI indicated that the additional funding will support further production and delivery activities under demanding timelines, reinforcing Germany’s ability to counter long-range ballistic missile threats. The system is designed for exo-atmospheric intercepts and is intended to integrate with allied air and missile defense networks.

The Arrow 3 program is led by IAI as prime contractor and has been developed in cooperation with Israel’s Ministry of Defense, including its Homa Directorate within the Directorate of Defense Research and Development, as well as the U.S. Missile Defense Agency. Israeli officials stated that the program also contributes to Israel’s own missile defense posture while strengthening industrial and operational ties with Germany and the United States.

For Germany, the Arrow 3 acquisition represents a major investment in strategic air and missile defense capabilities amid heightened attention to long-range threats in Europe. For Israel’s defense industry, the expanded contract further consolidates IAI’s role as a leading supplier of advanced missile defense systems to NATO partners.