Rheinmetall plans IPO of Kolbenschmidt Pierburg car parts unit
FRANKFURT (Bloomberg) -- Rheinmetall, the maker of KS Kolbenschmidt engine pistons and a partner in Germany's Puma battle tank, will sell shares in its automotive division in an initial public offering in the first half of this year in order focus on its defense business.
Rheinmetall will initially remain the majority shareholder in Kolbenschmidt Pierburg, or KSPG, after it lists on the Frankfurt Stock Exchange and will cede control "in steps," the Dusseldorf-based company said.
"With this IPO, Rheinmetall and KSPG are consistently pursuing their strategy of each focusing on their core businesses," Rheinmetall CEO Klaus Eberhardt said in a statement. "This brings about additional potential for both companies to continue growth, increase their market share and improve their competitive positions."
The company could sell a 50 percent stake in an IPO, which may value the division at about 1 billion euros ($1.3 billion), people with knowledge of the plans said last week, declining to be identified as the plans were private.
The final amount to be raised as well as the size of the stake that would start trading in June will depend on investor demand and market conditions, the people said.
Rheinmetall said last month that it expects revenue from auto parts to increase 5 percent to about 2.4 billion euros this year.
The IPO of Kolbenschmidt, which makes car parts such as pistons that help reduce fuel consumption and emissions, was postponed in November because of market volatility, people said at the time.