Rheinmetall Delays IPO of KSPG Auto Parts Unit

Engineering group Rheinmetall AG has postponed plans for an initial public offering for its automotive subsidiary KSPG until after this summer, citing Europe's volatile financial markets.

The Dusseldorf-based company had planned to sell a minority stake in KSPG (previously called Kolbenschmidt Pierburg) for about €1 billion by mid-July and spin off the rest of the business later.

Rheinmetall says it will review the IPO option at an "appropriate time" in the future. KSPG makes pistons, engine blocks and components to reduce emissions and fuel consumption.

Other European companies share Rheinmetall's market concerns. Two weeks ago, Chemical maker Evonik Industries AG delayed its scheduled IPO in late June. Analysts previously estimated Evonik, whose products include resins used in automotive fuel and brake systems, could raise as much as €17 billion.

At the end of May, motor sports promoter Formula One Group has backed off its $2.5 billion (€2 billion) IPO in Singapore.