Europe's Airbus Group is selling its Defense Electronics business to KKR & Co., a U.S.-headquartered global investment firm.

The sale is expected to close in the first quarter of next year and is subject to customary closing conditions, including regulatory approvals and employee consultation, Airbus said.

"This is ... aimed at repositioning Defense Electronics for the future with an excellent outcome for all stakeholders," said Bernhard Gerwert, chief executive officer of Airbus Defense and Space. "Defense Electronics is a strong, profitable business with significant growth potential and we are convinced that KKR and the Defense Electronics management team and employees will continue to strongly develop the business going forward."

Defense Electronics, based in Germany, is a provider of mission-critical sensors, integrated systems and services for defense and security. Its sale to KKR is seen as a step forward in the portfolio reorganization announced by Airbus Defense and Space in 2014.

KKR has valued the defense electronics business at an enterprise value of about $1.58 billion. The Airbus Group said it may maintain a minority stake in the business to ensure a smooth, seamless transition for all concerned.

"We are delighted to have been chosen as the best partner for the defense electronics business," said Johannes Huth, member and head of KKR Europe, Middle East and Africa. "KKR will support the growth and development of the company with its financial resources, international network, long-standing expertise in the global industrial sector and its extensive experience building successful industrial companies in Germany, such as MTU Aero Engines, Demag Cranes and Kion."