German Rheinmetall is preparing to finally get rid of its civilian business to focus entirely on military products. This is very indicative, as 13 years ago, or almost before the war in Ukraine, the company was considering the possibility of doing the complete opposite – switching to purely civilian production.
According to the press service of the concern, 100% of its shares in the Power Systems division will be sold to the AEQUITA industrial group for 350 million euros, but this amount may change depending on market conditions. The deal is expected to be finalized in the fourth quarter of 2026.
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Back in 2023-2024, Rheinmetall sold its production of small and large diameter pistons. Now, with Power Systems, it will finally exit the business of supplying civilian automotive products.
However, Rheinmetall will not get rid of all relevant enterprises – some of them are being reoriented to military production. Thus, Dermalog SensorTec GmbH will remain part of the concern on a permanent basis and will be included in the weapons and ammunition division. The Spanish Pierburg S.A.’s Abadiano will also be in Rheinmetall and will operate in hybrid mode, producing civilian products until the full transition to military ones is made.
From Defense Express, we note that we actually have another proof of the return of defense production as a profitable main line of work and a change in public perception of the industry. Of course, the biggest impetus for accelerating this process was russia's full-scale invasion to Ukraine in 2022.
After the Cold War had ended and the corresponding reduction in defense weapons started, Rheinmetall invested in civilian sectors in order to diversify. Moreover, the concern began to have serious problems, because large institutional investors, such as German pension funds, saw the company as "ethically tainted" due to the production of weapons.
As a result, in 2013, the option of exiting the defense business and focusing on supplying components for the automotive industry was considered. At the same time, the concern even agreed to build a military training ground for russians. However, everything changed in 2014 with the beginning of russian aggression against Ukraine, after which interest in military products gradually began to recover.
A similar path can be traced in other weapons manufacturers. Here we can mention BAE Systems Hägglunds, which produces the CV90 infantry fighting vehicle. This company actively laid off workers in the early 2010s - Defense Express wrote about this story in more detail earlier.
It is interesting that even after russia's full-scale invasion of Ukraine in 2022, they in Europe still had doubts about the need to invest in the defense industry. However, in early 2025, a new White House administration came to the United States, which started trade wars and "threatened" Greenland and Canada. Then the issue of the criticality of their own security became clearer for European investors and companies.
Now defense production has regained its status as one of the important industrial sectors of European countries. In particular, Rheinmetall has significantly increased a production of weapons and ammunition, and is also actively increasing its presence in various countries around the world, including Ukraine.
As Defense Express reported, Ukraine's Ruta Developer Partnered with Rheinmetall to Co-Produce HIMARS-Type System, Cruise Missiles. We also wrote, that Rheinmetall Intended to Produce Up to 400 Skyranger and Skynex Systems Annually to Counter Shahed Drones in Ukraine and Europe.
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