Rheinmetall says goodbye to automotive.
The defense company led by Armin Papperger has announced the sale of its struggling automotive activities for 350 million euros to the Munich investment fund Aequita, aiming to focus on the defense business, which is rapidly expanding in the context of European rearmament. The two parties have signed an acquisition contract that, according to Rheinmetall, “paves the way for the future of the former Power Systems division under new leadership.”
The group will therefore sell the automotive division for less than half a billion euros. “A modest price for a business with nearly 2 billion euros in revenue,” notes the French daily Les Echos.
As Reuters recalls, Rheinmetall, whose business has grown exponentially since the start of the war in Ukraine, thanks to increased defense spending in Europe, has been seeking a buyer for its Power Systems division since last year and classified it as discontinued operations as of December 2025.
But the decision also has repercussions in our country: yesterday Fiom-Cgil raised the alarm about the possible sale of the Power Systems division, which also includes the Pierburg plants in Lanciano and Livorno in Italy. According to the union, the German group is proceeding with the sale process of the Italian production sites independently, without involving the Ministry of Enterprises and Made in Italy and without respecting the commitments made within the institutional table opened on the matter. Fiom Cgil and Fim Cisl have therefore called for urgent government intervention: a strike of the workers at Pierburg Lanciano and Livorno has been declared for today.
All the details.
RHEINMETALL SEPARATES FROM THE AUTOMOTIVE DIVISION
The operation is expected to be completed in the fourth quarter of 2026, subject to regulatory approval. “We focus on high-margin activities with military customers, where we have excellent growth prospects,” said Rheinmetall CEO Papperger.
The division will be sold for a provisional amount of 350 million euros, subject to possible adjustments at the closing of the deal, scheduled for the fourth quarter. The sale will entail further write-downs of about 200 million euros, after Rheinmetall recorded a non-cash write-down of about 350 million euros related to the business in December, Reuters further specifies.
“In particular, the further deterioration of the business situation in the automotive sector has impacted the circumstances and terms of the final agreement,” the company stated in a press release.
WHAT THE BAVARIAN GROUP AEQUITA WILL DO
“The company represents an excellent acquisition for our automotive division, which will now generate revenues of about 5 billion euros,” said Axel Geuer, chairman and co-CEO of Aequita. The German investment company specializes in acquiring and restructuring companies, managing a portfolio of assets exceeding 10 billion euros, active in the automotive, chemical, and industrial sectors.
Under the agreement, Aequita will support the long-term development of the business and seek synergies within its automotive portfolio.
SCOPE OF THE SALE OF THE POWER SYSTEMS DIVISION
Rheinmetall stated that three German sites of the company specialized in aluminum casting KS Huayu AluTech, a stake in the joint venture Dermalog SensorTec, active in vehicle sensor technology, and the Abadiano plant in Spain of the auto components manufacturer Pierburg are excluded from the sale.
For its part, Aequita declared it intends to retain all approximately 6,250 employees worldwide of the civilian division acquired from Rheinmetall, considering it “the most important asset for the future development of the business” due to “highly qualified personnel.” The acquired company will continue to operate on the market with the historic brands Pierburg, Kolbenschmidt, and Motorservice.
But what will happen to the employees of the Pierburg plants in Tuscany and Abruzzo, part of the Power Systems division of the German defense giant?
UNION REACTIONS IN ITALY
The sale of the Power Systems division has alarmed Italian trade unions, particularly Fiom-Cgil, which described the situation as “very serious” and destined to become “an unprecedented case in the country’s industrial relations landscape.” According to the union, Rheinmetall’s decision to proceed with the sale without prior consultation at the table opened at the Ministry of Enterprises and Made in Italy would represent a violation of the commitments made by the company.
TODAY’S STRIKE
To draw attention to the dispute, Fiom-Cgil and Fim-Cisl have declared a strike today at the Pierburg plants in Lanciano and Livorno. For the first shift and daily staff, two hours of work abstention are planned, from 10 am to 12 pm, accompanied by pickets and assemblies in front of the production sites, while for subsequent shifts the strike will take place during the last two hours of work. The aim of the mobilization is to raise awareness among institutions, citizens, and public opinion about the possible consequences of the operation.
Among the demands put forward by the unions are the urgent summoning of Rheinmetall to the Mimit table with a representative endowed with full negotiating powers, the blocking of any sales procedure before institutional consultation, and the guarantee for Italian workers of the same employment protections provided in Germany.
