Rheinmetall Unloads Power Systems and Wins €1.7bn Satellite Constellation Order
Published on 06/12/2026 at 06:55 | Redaktion boerse-global.de
Rheinmetall has given its strategic overhaul a twin boost, selling off its last big civilian business while securing a multibillion-euro contract to build a military radar satellite network. The DĂĽsseldorf-based defence group is now fully committed to land, air and space systems, leaving its automotive-parts past behind for good.
The divestiture concerns the Power Systems division, which will be taken over by the German investor AEQUITA for a preliminary purchase price of around €350 million. The transaction is pencilled in for the fourth quarter of 2026, subject to clearance from antitrust authorities. The unit had long been a drag on group margins and added unwelcome complexity to a company that is scaling up its military output at breakneck speed.
On the same day the sale was announced, Rheinmetall revealed the creation of a new joint venture with the Finnish satellite operator ICEYE. Rheinmetall holds a 60% stake in the entity, dubbed Rheinmetall ICEYE Space Solutions GmbH, while ICEYE retains the remaining 40%. The venture will also involve German NewSpace startups such as Reflex Aerospace, all coordinated from the group’s headquarters in Neuss.
Should investors sell immediately? Or is it worth buying Rheinmetall?
The joint venture’s first major task is already lined up: the German Ministry of Defence has placed a roughly €1.7 billion order for a satellite constellation under the project name “SPOCK 1”. These synthetic aperture radar (SAR) satellites will deliver high-resolution imagery independent of weather or daylight, providing a critical reconnaissance capability. Production is set to kick off in the third quarter of 2026.
Chief executive Armin Papperger is driving the transformation of Rheinmetall into a full-spectrum technology group, shifting away from its civilian roots. The company now sits on an order backlog of about €73 billion, which includes a newly won, billion-euro contract from Romania, and aims to push annual revenue to €50 billion by 2030. To hit that target, production capacity must be ramped up aggressively.
Despite the flurry of positive news, the stock has struggled this year. It ended Thursday at €1,232, a gain of 2.8% on the session, as investors cheered the clean break from civilian activities. Yet the shares remain down roughly 23% since the start of 2024 and trade well below their 200-day moving average, which sits at around €1,607. A recent low near €1,100 from May is seen as the next key support level.
The market backdrop is also less favourable than it was. Morgan Stanley downgraded the European defence sector from “positive” to “neutral” on Wednesday, arguing that after years of explosive gains, fresh catalysts are now scarce and order inflows have begun to stabilise at a high plateau. Rheinmetall’s relative strength index stands at 47, suggesting the selling pressure is easing but not yet exhausted. The new space business may yet provide the narrative needed to reignite momentum, but the market wants to see margins improve first. The Q4 2026 closing of the Power Systems sale will deliver a clear cash injection and remove the last distraction from the group’s core mission.
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