Israel Aerospace Industries (IAI) announced today that it signed a contract valued at approximately around 3.1 billion USD with Israel’s Ministry of Defense (IMOD) for the expansion of Germany’s procurement of the Arrow 3 air missile defense system. This announcement follows the IMOD’s announcement dated December 17, 2025, regarding the signing of the agreement with the German Federal Ministry of Defense.
IAI President and CEO, Boaz Levy:”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, reflecting the deep vote of confidence in IAI’s capabilities, in Israeli technology and the strategic partnership between our two countries. Delivering an advanced air missile defense system that has been tested and operationally proven, while meeting demanding timelines, significantly enhances Germany’s missile defense capabilities against evolving threats. This cooperation is based on shared values and a mutual commitment to protect civilian lives and serves as a foundation for the development of the next generation of air and missile defense systems. I would like to thank IMOD and the Homa Directorate for their close cooperation that led to the signing of this follow-on contract, together with our partners at the German Federal Ministry of Defense and the U.S. Missile Defense Agency (MDA).”
The total value of the Arrow 3 contract is expected to exceed 6.5 billion USD, making it the largest defense export deal in the history of the State of Israel. The agreement will enhance the air and missile defense capabilities of both Germany and Israel.
The Arrow 3 air missile defense system was developed by Israel Aerospace Industries, as the prime contractor for the system’s development and production, and in cooperation with Israel’s Ministry of Defense’s, Homa Directorate within the Directorate of Defense Research and Development (DDR&D), and the U.S. Missile Defense Agency (MDA).
File photo courtesy IAI