Major German company could leave South Africa

German radar maker Hensoldt is exploring options for its South African optronics business, including a potential sale, according to people familiar with the matter.

Hensoldt is working with Deloitte to review the business, said the people, who asked not to be identified because discussions are private. The operation could attract interest from companies in the field, as well as buyout firms.

The Hensoldt business sells products including gimbal-mounted cameras that can assist helicopters, fixed-wing aircraft and unmanned aerial vehicles in surveillance and targeting.

The unit builds airborne electro-optical and infrared systems, including the Argos and Bushbaby brands.

A sale of the South African operation, which is viewed as non-core, wouldn’t impact Hensoldt’s German optronics business, which is a key part of future growth, some of the people said. 

South Africa is the company’s largest industrial base outside Germany, with products including electromagnetic warfare kit, optronics, radar and datalinks, as well as spectrum management and security solutions. 

Representatives for Hensoldt and Deloitte declined to comment.

Hensoldt’s main optronics division, headquartered in Oberkochen, employs around 1,000 people and makes products including thermal imaging cameras, periscopes for armoured vehicles and submarines, and precision optics for chipmaking.

Owners of defense assets are seeking to tap the rising demand among buyout firms to invest in Europe’s military sector.

Governments in the region have pledged to spend hundreds of billions of euros to boost Europe’s homegrown capabilities and reduce dependence on the US.