The Franco-German armaments group KNDS is taking over French rail vehicle manufacturer Alstom's factory in the eastern German city of Görlitz. Executives from both companies signed the deal on Wednesday while joined by German Chancellor Olaf Scholz at an event in Görlitz.

KNDS will start using the plant this year to produce assemblies for the Leopard 2 battle tank, the Puma infantry fighting vehicle and variants of the Boxer wheeled armoured vehicle, they said in a joint statement.

Franco-German defence group KNDS will turn an old train factory in eastern Germany into a production plant for tanks and other military vehicles under a deal sealed Wednesday.

The transformation of the Goerlitz plant, located near the Polish border, into a combat-vehicles plant should be completed in 2027.