Italian truck-maker Iveco is looking to raise as much as 1.5 billion euros ($1.6 billion) from a sale of its defence unit, Bloomberg reported on Friday, as a projected defence spending surge in Europe stokes interest for military assets.

The Turin-based company last month said it was considering spinning off its IDV defence unit this year to simplify its structure and create greater flexibility for both businesses.

A spin-off would normally lead to a separate bourse listing, but investors have been speculating that Iveco could opt instead for a sale of the unit.

Media reports have mentioned among possible buyers Italian state-controlled defence group Leonardo, Franco-German joint-venture KNDS and UK defence giant BAE Systems.

IDV cooperates with Leonardo on a number of projects including a joint-venture between Leonardo and Germany’s Rheinmetall for combat ground vehicles.

Source: Globalbankinandfinance