The Swiss industrial group, SIG, has sold most of its 140-year-old small arms and rifle business to two German private investors. About 100 jobs are at risk in the remainder of the division.
SIG said that the buyers - said to be "successful" in the textile industry in Germany - had acquired the pistols, hunting rifles and barrel manufacturing sectors from the small arms division.
The company's chief executive, Roman Boutellier, told a news conference in Zurich on Wednesday that he was pleased that a majority of jobs could be secured.
About 100 jobs are at risk. The sectors affected are the assault rifle assembly in Neuhausen am Rhein - near Schaffhausen - and the sports weapons production site at SIG Arms Hämmerli in Lenzburg, canton Aargau.
However, Boutellier voiced optimism on the possible job loses: "We are intensively looking for partners and have held talks with three possible partners for the assault rifle sector," he said.
The company also said that SIG was making every effort to internally relocate as many employees as possible, with 70 vacancies currently available.
SIG said the sale still needed the approval of the monopolies commission, and said both parties had agreed not to disclose the purchase price.
The sale of the small arms division, announced in January, is part of restructuring efforts. SIG has been transforming itself from a diversified company, built around machinery and engineering businesses, into a global group focusing on packaging technology.
"With the sale of 90 per cent of the small arms division, a decisive step has been taken towards implementing the group strategy," the company stated.
The arms division makes firearms for law enforcement, military and special units, as well as for hunting and sports. It includes such leading international brands as Mauser and Sauer, and had sales of SFr70 million in the first half of this year.
It posted an operating loss of SFr2 million, down from a SFr5 million profit in the comparable period last year.
SIG Arms has been shifting to civilian business from the military sector. The latter has been losing appeal since defence spending dropped with the end of the Cold War.
The division suffered a setback last year due to the expiry of its assault rifle contract with the Swiss Army.
by Robert Brookes