Rheinmetall sells automotive supply division to Aequita for 350 million euros to focus on defense

German defense contractor Rheinmetall is selling its automotive supplier division to the private equity firm Aequita.

Rheinmetall announced on Wednesday that the two companies “signed an acquisition agreement today, opening up a future for Rheinmetall’s former Power Systems division under new management.”

The group described the divestment of its civilian unit as a “milestone in its strategic restructuring,” which allows it to “shift its focus to its military business.”

The transaction is expected to close in the fourth quarter of this year and remains subject to regulatory approvals.

The preliminary purchase price for 100% of the shares has been set at 350 million euros, though this figure remains subject to adjustment prior to the closing of the deal.

Rheinmetall recently reported record profits and swelling order books in its defense business. Conversely, the automotive supply industry remains mired in crisis.

“The further deterioration of the business situation, particularly in the automotive sector, affected the terms and conditions of the final agreement,” Rheinmetall said in a statement.

Rheinmetall, which has seen its business surge since the start of the war in Ukraine as Europe increases its defense spending, had been seeking a buyer for the Power Systems division since last year and classified the unit as discontinued operations in December 2025.

Rheinmetall added that Aequita, an investment firm specializing in acquiring and restructuring companies, plans to retain the unit’s approximately 6,250 employees worldwide.

“This company is an excellent addition to our automotive division, which will now generate approximately 5 billion euros in revenue,” said Axel Geuer, Chairman and Co-CEO of Aequita.

Geuer added that Aequita will support the long-term development of the company and seek to create synergies across its broader automotive portfolio.

Rheinmetall specified that assets excluded from the sale include the three German plants of aluminum casting specialist KS Huayu AluTech, the stake in the automotive sensor joint venture Dermalog SensorTec, and auto parts manufacturer Pierburg’s Abadiano factory in Spain.