Israel’s Ministry of Defense has confirmed the signing of a new defence agreement with Germany worth approximately $3.1 billion, aimed at expanding Germany’s Arrow-3 air and missile defence capability.
The contract builds on earlier milestones in Israeli-German defence cooperation and reflects Berlin’s accelerated push to strengthen air and missile defence in response to Europe’s evolving security environment. According to the Israeli Ministry of Defense, the agreement follows the initial Arrow-3 contract signed in November 2023, which marked the first-ever export of the exo-atmospheric interceptor and established Germany as a key participant in the European Sky Shield Initiative.
The original Arrow-3 deal, finalised in late 2023 after receiving U.S. government approval, was valued at roughly $4 billion and represented the largest defence export agreement in Israel’s history. That contract covered the procurement, integration, and initial deployment of the Arrow-3 system for Germany, signalling a major shift in German defence planning toward long-range ballistic missile interception. At the time, Israel indicated that deliveries would begin in 2025.
Israel subsequently delivered the first operational Arrow-3 system to Germany during a formal ceremony at a German Air Force base near Berlin. The Ministry of Defense described the event as a key implementation milestone under the export agreement signed nearly two years earlier, demonstrating tangible progress toward operational integration. The delivery included core system components intended to support early incorporation into Germany’s national air defence network.
The newly announced $3.1 billion contract significantly broadens the scope of the original agreement, encompassing additional system elements, expanded coverage, and long-term sustainment. The objective is to enable Germany to deploy Arrow-3 at scale, ensuring adequate interceptor stocks, enhanced command-and-control integration, and sustained operational readiness over the long term.
Arrow-3 represents the uppermost layer of Israel’s multi-tier missile defence architecture and is designed to intercept ballistic missiles outside the Earth’s atmosphere using a hit-to-kill kinetic interceptor. By engaging threats during the midcourse phase of flight, the system destroys incoming missiles before atmospheric re-entry, reducing the risk of debris or warhead detonation over defended areas. Arrow-3 is developed by Israel Aerospace Industries’ MLM Division in close cooperation with the U.S. Missile Defense Agency.
