France, Germany to become equal shareholders in tank maker KNDS ahead of IPO
France and Germany Reach Landmark Agreement on KNDS Shareholding and IPO
Overview of the Shareholder Agreement
BERLIN/PARIS, June 22 (Reuters) - France and Germany have agreed to become equal shareholders in tank maker KNDS, the two governments said on Monday, paving the way for what is expected to be one of Europe's biggest defence company listings.
The agreement is subject to German parliamentary budget approval of a planned acquisition of a 40% stake in the company from the German family owners that currently hold half of KNDS. France owns the other half.
Key Terms of the Deal
The deal sets out long-term shareholder commitments, equal governance rights and oversight of security matters, ahead of KNDS' planned dual listing in Frankfurt and Paris next month.
Joint Statement from France and Germany
"This agreement reflects the shared determination of France and Germany to strengthen Europe's industrial and defence capabilities, support their armed forces, and strengthen European sovereignty over the long term," the governments said in a joint statement.
Next Steps and Parliamentary Approval
Germany's budget committee is due to formally decide on Wednesday on the planned acquisition of the stake in KNDS, according to a German defence ministry report, which said the decision was necessary to ensure that the company can go public in July. The intention to float KNDS was planned in June, it said.
Valuation and Strategic Implications
Germany's stake purchase will value KNDS at €15 billion to €18 billion ($17.2 billion to $20.6 billion), a source familiar with the matter told Reuters on Sunday, in a deal aimed at creating a counterweight to France.
Golden Share and Governance Structure
Germany is also targeting a so-called "golden share" in KNDS' German unit, the document said, which would come with extended influence over personnel and strategic matters at the country level and ensure a balance of power between Paris and Berlin.
Background and Industry Context
The planned listing of KNDS marks one of the continent's biggest and most prestigious defence listings and comes after a recent setback for Franco-German relations following the collapse of the joint FCAS new-generation fighter jet.
KNDS was created via the merger of the former Krauss-Maffei Wegmann (KMW) and France's Nexter.
($1 = €0.8726)
(Reporting by Holger Hansen, Florence Loeve and Elizabeth Pineau; Writing by Christoph Steitz; Editing by Friederike Heine, Linda Pasquini and Emelia Sithole-Matarise)
