Rheinmetall divests civilian unit to focus on defence

With the sale of its civilian activities, the Rheinmetall Group has reached a milestone in its strategic realignment. Rheinmetall and the Munich-based industrial group AEQUITA have now signed a purchase agreement that paves the way for the future of Rheinmetall’s former Power Systems division under new management. For some time now, Rheinmetall has been focusing on the rapidly growing business with military customers and security agencies, while at the same time expanding its technological portfolio into the domains of air, sea and space. Since last year, the Group has been in talks with potential buyers for its civilian business, which have now been successfully concluded with the signing of an agreement to sell it to AEQUITA. The transaction, which is expected to be completed in the fourth quarter of 2026, is subject to approval by the relevant regulatory authorities. The provisional purchase price for 100% of the shares is €350 million and is subject to standard market adjustment mechanisms until closing. The actual final purchase price may therefore differ from this figure. Following the sale of its large- and small-bore piston operations in 2023/2024, Rheinmetall is now, as announced, taking the decisive step in its exit from the automotive supplier business. The Power Systems division, which generated sales of around €2 billion in 2025, has been classified as a “discontinued operation” of the Group since the reporting for the fourth quarter of 2025. AEQUITA intends to retain all of the approximately 6,250 Power Systems employees working worldwide at the companies being acquired. AEQUITA will operate the former Rheinmetall Power Systems division as an independent entity, with all trademark rights remaining within the company. The company will continue to operate on the market as usual under its long-established brands Pierburg, Kolbenschmidt and Motorservice. “This is a significant milestone in the company’s history. We are focusing on the high-margin business with military customers, where we have excellent growth opportunities. Our stated objective was to place our civilian business operations in capable hands. We have found an excellent buyer in AEQUITA,” says Armin Papperger, CEO of Rheinmetall AG. “The internationally successful industrial  holding company combines extensive experience in the industrial and automotive sectors with a focus on entrepreneurship, transformation and a long-term perspective.” “This makes AEQUITA the ideal partner to work with the Power Systems management team to implement the strategy that has been developed and to ensure the long-term success of the Kolbenschmidt and Pierburg brands in the market,” explains Marcus Gerlach, lead negotiator for Rheinmetall AG. “We are very proud that Rheinmetall has chosen AEQUITA as the new owner of the Power Systems division. The company is an excellent addition to our Automotive division, which will now generate revenues of approximately €5 billion. In the years to come, our focus will be on actively supporting the long-term, successful and sustainable development of the company. This also involves realising synergies within our automotive portfolio,” says Dr Axel Geuer, Chairman and Co-CEO of AEQUITA. Excluded from the sale are the three German locations of KS Huayu AluTech GmbH (Neckarsulm, Walldürn and Langenhagen), which will remain within the Rheinmetall Group as a joint venture in the medium term – and continue to be classified as a “discontinued operation”. The stake in Dermalog SensorTec GmbH, however, will remain within the Rheinmetall Group on a permanent basis. It will be integrated into the Weapon and Ammunition division, and its employees will continue to be based at the Neuss location. Pierburg S.A.’s Abadiano plant in Spain will also remain with Rheinmetall, along with its workforce and tangible assets. For a transitional period, it will operate as a hybrid site, manufacturing both civilian and military products until the switch to military production is complete. American Rheinmetall announces $41 million US defence investment American Rheinmetall has announced a strategic $41M capital investment initiative across its U.S. manufacturing operations in Michigan, Ohio, and Maine to expand production capacity, modernise manufacturing infrastructure, strengthen domestic supply chain resillience, and accelerate delivery timelines for critical U.S. defence modernisation programs. The investments build upon American Rheinmetall’s established U.S. manufacturing footprint, leveraging proven facilities, skilled workforce capabilities, validated production processes, and existing supplier networks to deliver immediate operational impact in support of national defense priorities. Key programs supported through these investments include the U.S. Army’s XM30 Combat Vehicle, Mobile Tactical Cannon (MTC), Common Tactical Truck (CTT), and Common Autonomous Multi-Domain Launcher (CAML), along with critical missile, subsystem, and combat mobility component production. “At a time when speed, scalability, and certainty are paramount, expanding existing capabilities provides a decisive advantage,” said Matt Warnick, CEO, American Rheinmetall. “These investments reflect our long-term commitment to supporting the U.S. Warfighter and strengthening the domestic defense industrial base. By modernizing and expanding proven infrastructure already in place, we are positioned to respond faster, scale production more effectively, and deliver the critical systems and components needed to meet evolving national security demands.” To date, approximately $12 million of the investment has already been executed through completed equipment installations and facility upgrades. An additional $26 million is currently being deployed through ongoing equipment procurements, automation initiatives, facility modernization efforts, and manufacturing expansion projects, with remaining investments scheduled for implementation later this year. American Rheinmetall’s investment strategy prioritises the expansion and modernisation of existing operations rather than constructing entirely new facilities. This approach significantly reduces time-to-production while maintaining the quality, reliability, and execution certainty required for mission-critical defence systems. The investments are designed to enable: Rapid production ramp-up for artillery, combat and tactical wheeled vehicle platforms,  , and components; Increased manufacturing throughput; Expanded production capacity for critical combat vehicle structures and mobility systems; Enhanced precision manufacturing capability for missile-related and subsystem integration work; Strengthened domestic sourcing and industrial base resilience; Greater manufacturing flexibility and surge production capability across multiple defense and commercial product lines. Among the major equipment additions is a new Dynomec 65-foot bridge mill manufactured by FPT and a large-format machining center capable of machining complete vehicle hull structures. The machine is intended to position American Rheinmetall to support future production capacity requirements for the Army’s XM30 combat vehicle program, should the company be awarded a production contract, as well as other next-generation combat vehicle systems requiring large structural machining capability. Additional investments include: A Kapp ZE 800 Gear Grinder to enhance precision manufacturing capability for combat vehicle final drive systems; Two new FPT Dinox 350 5-axis machining centers to expand complex machining throughput and manufacturing flexibility; Upgrades to the company’s turret build center supporting advanced combat vehicle integration work; New Coordinate Measuring Machine (CMM) inspection equipment and establishment of an advanced inspection laboratory to strengthen metrology and product validation capability; Two Stinger 180 5-axis machining centers supporting precision missile-related manufacturing; Cure presses, build machines, defense track and wheel equipment upgrades, and automation improvements supporting dual-use commercial and defense rubber track production lines. American Rheinmetall’s expanded manufacturing footprint directly supports U.S. defence modernisation objectives by aligning advanced capability development with scalable production readiness. Programs such as the MTC require the ability to rapidly transition from prototyping into sustained production environments. Likewise, the XM30 Combat Vehicle, CTT, and CAML programs benefit from manufacturing operations that are already active, workforce-ready, and deeply integrated into the U.S. defense industrial base. “Modernisation is not just about innovation — it’s about execution,” added Matt Warnick. “Our investments ensure that capability and capacity move forward together, aligned with customer timelines, operational requirements, and long-term readiness objectives.” For Editorial Inquiries Contact: Editor Kym Bergmann at [email protected] For Advertising Inquiries Contact: Group Sales Director Simon Hadfield at [email protected]