Vokswagen, the German state of Lower Saxony and Israeli-owned Aurelius Capital have agreed on key terms for the potential sale and conversion of Volkwagen’s Osnabrück plant into a center for security-and-defense manufacturing, the automaker said on Monday.
Aurelius and Lower Saxony plan an initial project with Israel’s Rafael Advanced Defense Systems that could involve manufacturing air-defense systems and components for Germany and Europe, according to Volkswagen. Rafael would provide technology and air-defense expertise, while the Osnabrück workforce would help establish and industrialize the production.
Volkswagen announced in 2024 that it would phase out vehicle production at the plant in the summer of 2027. The planned transaction, subject to final agreements, corporate approvals and regulatory reviews, is intended to preserve the site and secure most of its jobs over the long term.
The company said more than 1,200 employees could gain a future at the facility, which Volkswagen, Aurelius and Lower Saxony aim to develop gradually into a defense-industrial hub.
Volkwagen Group CEO Oliver Blume in the statement called the agreement “an important step towards opening up a new industrial future for the site.”
Calcalist Tech reported that Rafael CEO Yoav Turgeman said at the signing: “The technology will be fully manufactured in Germany and will contribute to strengthening the security of Germany in particular and Europe in general.”
The deal moves forward after months of reports that Qatar’s investment fund, which holds a 17% voting stake in Volkswagen, was seeking to obstruct the prospective Rafael partnership. While Bild reported in July that Doha had effectively vetoed the transaction, WirtschaftsWoche subsequently said negotiations remained underway.
JNS learned at the time that Qatar’s stake was not being used to block the deal. The proposed structure involving Aurelius and the state of Lower Saxony appears to provide a path for the Osnabrück site’s transition to defense production.
