Just two weeks after receiving the first units of its advanced Arrow 3 air defense systems from Israel, Germany has significantly bolstered and expanded its strategic partnership, turning this acquisition into Israel’s largest export deal in history, totaling an astounding $6.5 billion.
A Deepening Strategic Alliance Israel’s Ministry of Defense officially confirmed on Wednesday that the German Bundestag has approved an expansion of the Arrow 3 defense system contract. This additional commitment, valued at approximately $3.1 billion, complements the initial purchase agreement signed by Israel and Germany roughly two years ago, which was worth about $3.5 billion. The combined value of the deal now stands at an impressive $6.5 billion. Israeli Defense Minister Israel Katz lauded the Bundestag’s approval, emphasizing that this government-to-government agreement signifies Germany’s profound confidence in Israel’s capabilities.
This represents a first-tier strategic partnership rooted in a long-term defense strategy. The revenues from this deal will enable continued advanced strategic developments, strengthen the IDF’s force posture, and ensure Israel’s qualitative edge in the years ahead against adversaries — while deepening defense cooperation with strategic partners across Europe and globally.
Proven Technology, Demonstrated Success The Arrow 3 system was developed by Israel Aerospace Industries (IAI) in conjunction with the US Missile Defense Agency, as part of a joint Israel-US program spanning decades. It constitutes the top tier of Israel’s multi-layered air defenses and has notably succeeded in recent conflicts, confronting ballistic missile threats from Iran and the Iranian-backed Houthis.
IAI CEO Boaz Levy highlighted his company’s pivotal role in Germany’s air defense array and the trust established with the German government, recently demonstrated by the delivery of the Arrow 3 system just two years after the initial contract signing. He also praised the system’s proven advanced technological capabilities and noted IAI’s adherence to the contract’s delivery timeline.
Major Boost for Israel’s Defense Industry The expanded contract was expected to be signed today. Amir Baram, Director General of the Israeli Ministry of Defense, stated that the agreement „will reinforce Israel’s position as a global security leader, accelerate Arrow production for the IDF, and channel billions into strengthening our defense industrial base and advancing next-generation air defense capabilities.”
This large-scale transaction comes amidst a series of significant deals recently secured by Israel. Elbit Systems announced a $2.3 billion deal with an unnamed customer in November, alongside a $1.6 billion deal for an unnamed European country in August. Furthermore, UVision secured a contract worth almost a billion dollars in the US in October.
The Ministry of Defense further noted that the expansion of Israel’s defense exports, which reached a record high in 2024 and are anticipated to perform well in 2025, „will significantly enhance the IDF’s force build-up and strengthen Israel’s defense industry and economy.”
