KNDS NV, the Franco-German tank manufacturer, has announced the postponement of its planned initial public offering (IPO) in Frankfurt and Paris. This decision, communicated on Wednesday, July 1, 2026, was attributed to challenging market conditions, despite the company's robust underlying performance and a general surge in European defense spending. The IPO aimed to float 20% of the company's shares, with existing owners -- the French state and Wegmann & Co. Gmbh -- offering the stake.
The postponement follows a period of investor skepticism, primarily concerning the IPO's structure. Early estimates for KNDS's valuation had been over $20 billion, but this target was subsequently revised down to approximately $15 billion due to pushback from institutional buyers. Investors expressed concerns over a proposed 10-year lock-up period for state shareholders holding less than 30%, which would leave a 20% free float as a minority position in a company where majority ownership, held 40% each by the French and German states, would be static for a decade. The German government recently finalized its acquisition of a 40% stake from the Wegmann family to balance French and German ownership, paving the way for the IPO.
Despite the market's reservations about its governance and ownership structure, KNDS possesses strong financial fundamentals. For fiscal year 2025, the company reported $4.4 billion in revenue, a 16% year-over-year increase, along with $661 million in EBIT and $980 million in free cash flow. It also boasts a record order backlog of $33.1 billion, representing roughly seven and a half years of revenue at current rates. The IPO was structured as a secondary sale, meaning no new capital would flow directly into the company.
The delay means that the launch, initially targeted for mid-July 2026, will not proceed as planned. KNDS, formed in 2015 from the merger of Germany's Krauss-Maffei Wegmann and France's Nexter, manufactures Leopard 2 and Leclerc tanks and Caesar howitzers. The company had previously considered pushing back its offering to avoid competition with SpaceX's anticipated IPO, which was also slated for a June launch. The postponement underscores the difficulties faced by major defense IPOs in Europe, grappling with investor scrutiny regarding state ownership and valuation.
