German technology enterprise Rheinmetall has signed a letter of intent (LoI) to acquire a 25.1% stake in the Hungarian digitisation service provider 4iG.

The acquisition is part of Rheinmetall’s digitisation strategy and marks the first step for the company in establishing an information technology (IT) and telecommunications hub in central Europe.

With the stake acquisition, 4iG will become Rheinmetall’s strategic IT partner and support the defence company’s entry into new digital markets.

It will serve as Rheinmetall’s digitisation service provider in Hungary.

4iG executive board president and chairman Gellért Jászai said: “The agreement with Rheinmetall supports our vision of international expansion in the technology sector.”

Rheinmetall plans to form a separate joint venture, with Rheinmetall owning a 51% interest and 4iG owning the remaining 49%.

This will help the company set up its own IT infrastructure and services in Hungary.

Rheinmetall chief executive Armin Papperger said: “Our participation in 4iG is an integral part of Rheinmetall’s digitisation strategy. But it is also a token of our special commitment to Hungary.

“In recent years, Rheinmetall has made great strides in internationalising its operations, meaning that we have now gained new domestic markets in the UK, Australia and Hungary in addition to Germany, our original home market.

“In these and other Western countries, Rheinmetall is actively creating local production and R&D capacity, enabling us to offer as complete an array as possible of top-of-the-line defence technology products and services.”

Furthermore, the partners plan to cooperate on satellite communication, artificial intelligence (AI) and robotics in the future.

Earlier this year, Rheinmetall announced that it had secured a new order to supply illumination and smoke/obscurant artillery shells to the Dutch armed forces.