Germany has finalized an agreement to acquire a 40% stake in the Franco-German defense equipment group KNDS from its family owners. This move is intended to match the existing 40% stake held by the French state, establishing equal ownership for both nations ahead of KNDS's anticipated initial public offering (IPO) this summer. German Chancellor Friedrich Merz's government has been actively pursuing this acquisition, primarily to safeguard critical technology and manufacturing expertise related to the tankmaker's operations.
Talks regarding the stake acquisition had previously stalled due to disagreements over pricing, following a surge and subsequent reversal in the valuation of European defense firms earlier in the year. The German government's decision, confirmed by an economy ministry spokeswoman, underscores its commitment to maintaining influence over major strategic decisions, including employment and production sites within KNDS. Although both governments are expected to reduce their stakes to 30% over the next two to three years, they will retain equal voting rights irrespective of the stake size.
KNDS, known for manufacturing tanks like the Leopard and Leclerc XLR, as well as Boxer armored personnel carriers, employs approximately 11,000 individuals and reported sales of $4.15 billion (€3.8 billion) in 2024. The family owners, specifically Wegmann & Co., the holding company for the firm's German family owners, agreed to sell their 40% share to the German government. The remaining portion of their stake, along with a portion of France's current holdings, will be offered to investors during the IPO, which could value KNDS between $16.5 billion (€15 billion) and $22 billion (€20 billion). The price of Germany's acquired stake will be determined by the market price at the time, without any premium or discount.
