Kongsberg closes Zone 5 deal, targets NOK 100 billion revenue by 2029

Kongsberg Gruppen's acquisition of a U.S. missile startup marks the latest bet that low-cost, mass-producible munitions will define the next phase of Western defense spending.

Norwegian defense and technology group Kongsberg (KOG.OL) on Wednesday completed its acquisition of U.S.-based Zone 5 Technologies, a developer of low-cost, mass-producible missile systems tied to U.S. Air Force efforts to scale affordable mass munitions, as Western militaries race to replenish depleted arsenals.

"Recent conflicts have demonstrated the critical role of high-volume defense capabilities. This is exactly what Europe needs," Kongsberg Chief Executive Officer Eirik Lie said in a statement.

Zone 5, which will operate as an independent subsidiary, has been involved in U.S. programs including the Extended Range Attack Munition initiative and related efforts to ramp production of lower-cost strike and air defense systems. Financial terms of the transaction, agreed in late 2025, were not disclosed.

The deal comes as Kongsberg lays out aggressive growth targets. The company aims to boost revenue to NOK 100 billion ($9.4 billion) by 2029, up from NOK 33 billion in 2025, and to NOK 150 billion by 2033, according to a press release at its capital markets day Wednesday. It is targeting an operating margin above 16 percent. The order backlog stood at NOK 152 billion at the end of the first quarter.

Kongsberg cited heightened geopolitical uncertainty, rising defense budgets and technological advances as drivers of sustained demand for air defense systems, missiles and remote weapon stations. It also identified growth opportunities in emerging areas such as subsea operations and space technology.

The acquisition positions Kongsberg deeper into the U.S. defense supply chain at a time when the Pentagon is prioritizing volume over sophistication in certain munitions categories. The U.S. Air Force's push for affordable mass munitions — cheaper, mass-producible alternatives to precision-guided weapons — has opened a new competitive front among defense contractors.

Kongsberg shares traded at 313.80 Norwegian kroner on Wednesday, down 0.82 percent on the session, but have gained 21.35 percent year to date, reflecting investor confidence in the company's expansion strategy.

This article is for informational purposes only and does not constitute investment advice.