Israel, Germany expand Arrow 3 deal in $3.1 billion contract

By Stav Levaton

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11 January 2026, 2:45 pm

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Stav Levaton is a military reporter for The Times of Israel

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)

Israel Aerospace Industries (IAI) announces it has signed a NIS 9.8 billion ($3.1 billion) contract with the Defense Ministry to expand Germany’s procurement of the Arrow 3 missile defense system, after the Israeli and German governments approved the deal last month.

The agreement is part of a larger package that, together with earlier agreements, is expected to exceed NIS 20 billion ($6.3 billion), making it the largest defense export deal in Israel’s history.

The Arrow 3 system was handed over to Germany last month in a ceremony at an airbase south of Berlin.