DUSSELDORF -- Rheinmetall has agreed to sell its Power Systems division to Munich-based industrial investment group AEQUITA in a deal valued at approximately EUR350 million, marking the German defense company's final major step in exiting the automotive supplier sector and concentrating on defense and security markets.
The companies signed a purchase agreement for the sale of 100% of the Power Systems business, which generated approximately €2 billion in revenue during 2025. The transaction is expected to close in the fourth quarter of 2026, subject to regulatory approvals and customary closing adjustments that could alter the final purchase price.
The divestment follows Rheinmetall's earlier sales of its large-bore and small-bore piston businesses during 2023 and 2024. The company has increasingly shifted its focus toward defense programs and security-related technologies as military spending rises across Europe and other regions. Since the fourth quarter of 2025, Power Systems has been classified as a discontinued operation in Rheinmetall's financial reporting.
AEQUITA plans to retain the approximately 6,250 employees working within the acquired businesses worldwide. Following completion of the transaction, the division will operate as an independent company and continue using its established Pierburg, Kolbenschmidt, and Motorservice brands.
Several assets are excluded from the transaction. The three German facilities of KS Huayu AluTech GmbH in Neckarsulm, Walldürn, and Langenhagen will remain within the Rheinmetall Group as part of a joint venture arrangement. Rheinmetall will also retain its stake in Dermalog SensorTec GmbH, which will be integrated into the company's Weapon and Ammunition division.
In Spain, the Pierburg S.A. facility in Abadiano will remain under Rheinmetall ownership. The site will continue producing civilian and military products during a transition period before shifting fully to military-related production.
AEQUITA is an industrial investment group focused on corporate carve-outs, succession situations, and business transformations across Europe. According to the company, its portfolio companies generate more than €10 billion in annual revenue across the automotive, chemicals, and industrial sectors. The acquisition expands AEQUITA's automotive operations and increases the scale of its industrial holdings.
This transaction marks the complete transformation of Rheinmetall from a diversified industrial manufacturer into a dedicated defense contractor. Driven by unprecedented increases in European military spending and heightened geopolitical tensions, the divestment allows Rheinmetall to reallocate its capital and engineering resources entirely toward high-margin defense technology, ammunition, and aerospace systems. By shedding its traditional automotive operations, the company eliminates exposure to the volatile civilian automotive supply chain while positioning itself to capitalize on sustained defense procurement cycles across NATO member states.
