Germany was set to sign a 3 billion euro ($3.5 billion) expansion to the Arrow 3 long-range missile defense system deal with Israel, after the Bundestag on Wednesday approved the contract.
This month, Israel delivered the first Arrow 3 battery to Germany, as part of a roughly 4 billion euro ($4.6 billion) deal signed between the countries two years earlier.
The expansion to the deal was set to be signed on Thursday in Germany by Israeli and German defense officials, after German lawmakers approved the contract on Wednesday — as part of a massive 50 billion euro ($58 billion) spending package on more than 30 contracts, amid the threat of Russia.
The 3 billion euro contract includes interceptor missiles for the Arrow 3 system, according to procurement documents cited by Bloomberg.
Israel’s Defense Ministry said the expansion contract would “significantly increase the production rate of Arrow 3 interceptors and launchers to be supplied to Germany, substantially enhancing its air and missile defense capabilities.”
In total, the Arrow agreement signed between Israel and Germany was valued at some $8 billion, making it the largest-ever Israeli defense export deal.
Israel’s Arrow 3 missile defense system is handed over to the German Air Force at the Holzdorf Air Base, eastern Germany, on December 3, 2025. (Defense Ministry)
The delivery of the Arrow 3 in early December marked the first time that the Israeli-made system had been deployed beyond the borders of Israel and the United States, and the first time it was operated independently by another country.
The first battery was deployed at the Holzdorf Air Base in eastern Germany, some 120 kilometers (75 miles) south of Berlin, with additional sites to follow.
The Arrow 3 is designed to take out ballistic missiles while they are still outside of the atmosphere.
The system, along with the older generation Arrow 2, has downed hundreds of ballistic missiles launched at Israel by Iran and the Iran-backed Houthi terror group in Yemen, with an interception rate of 86 percent during the 12-day conflict with the Islamic Republic in June.
The sale represented part of the German-led European Sky Shield Initiative to beef up continental Europe’s air defenses in response to Russia’s invasion of Ukraine.
Israel and Germany say that the agreement represents close and growing defense cooperation, which has included joint defense drills and the sale of the Israeli TROPHY active protection system for Germany’s Leopard 2 tanks.
