Rheinmetall Power Systems Divestment to AEQUITA Strengthens Defence Focus

Germany-based Rheinmetall AG has entered into an agreement to divest its Power Systems division to AEQUITA in a transaction valued at EUR 350 million. The Power Systems business generated approximately EUR 2 billion in sales during 2025 and represents a significant industrial operation within Rheinmetall’s broader portfolio. The transaction is expected to close during the fourth quarter of 2026, subject to regulatory approvals and customary purchase price adjustments that may apply before completion. The move aligns with Rheinmetall’s long-term strategic objective of concentrating resources and investments on its expanding defence activities.

Transaction Scope and Workforce Transfer

The divestment includes the global workforce associated with the Power Systems division, covering around 6,250 employees across multiple international locations. However, several operations are excluded from the transaction. These include the three German facilities of KS Huayu AluTech GmbH located in Neckarsulm, Walldurn, and Langenhagen, along with Dermalog SensorTec GmbH and the Abadiano manufacturing plant operated by Spain-based Pierburg S.A. The exclusions reflect Rheinmetall’s selective approach to retaining assets that support future strategic and operational priorities.

Key Assets Included and Excluded from the Deal

The following table summarizes the major elements covered by the transaction and the operations remaining within Rheinmetall.

Future Plans for Retained Operations

Rheinmetall confirmed that KS Huayu AluTech will continue operating as a joint venture within the group in the medium term. Meanwhile, Dermalog SensorTec will become part of Rheinmetall’s Weapon and Ammunition division, allowing the company to integrate sensor-related expertise into its defence-focused activities. Employees associated with Dermalog SensorTec will remain at the Neuss site. These decisions demonstrate Rheinmetall’s intention to preserve selected technological capabilities while realigning its overall business portfolio.

Transition Strategy for the Abadiano Facility

The Abadiano facility operated by Pierburg S.A. will follow a phased transition model. During the interim period, the site will function as a hybrid manufacturing operation producing both civilian and military products. Over time, production activities will progressively shift toward military applications until the conversion process is fully completed. This approach is designed to ensure operational continuity while supporting Rheinmetall’s broader transformation toward defence-oriented manufacturing and product development.

AEQUITA to Continue Established Automotive Brands

Following completion of the acquisition, AEQUITA will manage the former Power Systems division as an independent business entity. Operations will continue under the established Pierburg, Kolbenschmidt, and Motorservice brands, preserving market continuity for customers and partners. Trademark rights associated with these brands will remain within the company structure. The arrangement enables the acquired business to maintain its market identity while providing AEQUITA with a substantial industrial platform for future growth and development.

Frequently Asked Questions

Why is Rheinmetall selling its Power Systems division?
The sale is part of Rheinmetall’s broader strategy to strengthen its focus on defence-related operations and allocate resources toward military products and technologies. By divesting the Power Systems division, the company can streamline its portfolio and concentrate on growth opportunities within the defence sector. The transaction also supports Rheinmetall’s long-term transformation plans while ensuring that the transferred business continues operating independently under AEQUITA with its established brands and workforce.

What businesses and employees are included in the transaction?
The agreement covers Rheinmetall’s Power Systems division and approximately 6,250 employees worldwide. However, several operations are excluded, including the three KS Huayu AluTech facilities in Germany, Dermalog SensorTec GmbH, and the Abadiano plant of Pierburg S.A. in Spain. These retained assets will continue under Rheinmetall’s ownership or follow separate transition plans. The transaction is expected to close in the fourth quarter of 2026, subject to regulatory approvals and customary closing adjustments.

What will happen to the Pierburg, Kolbenschmidt, and Motorservice brands?
After the acquisition is finalized, AEQUITA will operate the former Power Systems division as an independent company while continuing to use the Pierburg, Kolbenschmidt, and Motorservice brands. This ensures continuity for customers, suppliers, and industry partners. The brands will remain active in the market, and their trademark rights will stay within the company structure. The arrangement allows AEQUITA to build on the existing reputation and market presence of these established automotive industry brands.