Tank maker KNDS joins European defence boom with IPO in Frankfurt, Paris
KNDS IPO and European Defence Industry Trends
By Maria Rugamer and Florence Loeve
June 24 (Reuters) - KNDS, the Franco-German maker of Leopard 2 tanks and Caesar howitzers, said on Wednesday it planned to list its shares in Frankfurt and Paris, in the latest initial public offering from the defence industry this year.
IPO Details and Shareholder Structure
The company will sell 20% of its share capital in the IPO, with proceeds going entirely to existing shareholders, it said. It will be one of the biggest European defence IPOs in recent years.
Recent Major Defence IPOs
Czech arms group CSG completed the biggest-ever defence IPO in January, valuing the company at €25 billion ($28 billion), while German warship builder TKMS reached a €5.15 billion valuation in its stock market debut in October 2025.
Valuation and German Stake
An agreement for Germany to purchase a stake in KNDS valued it between €15 billion and €18 billion, a source familiar with the matter told Reuters previously. The company is likely to be valued at around €15 billion in the IPO, another source familiar with the matter said on Wednesday.
Germany will pay more than the IPO price for its 40% stake under a formula that includes a customary control premium and post-listing share performance, according to a document seen by Reuters late on Tuesday.
Market Trends and Defence Valuations
Pressure on Defence Valuations
PRESSURE ON DEFENCE VALUATIONS
Europe's defence industry has seen a rally in defence company shares and new listings following Russia's invasion of Ukraine and a shift in U.S. foreign policy under President Donald Trump, which has driven a step-up in defence investment by European governments. That rally has since cooled.
Recent Stock Performance
Defence and aerospace stocks continued to be volatile this week, with Europe's benchmark index for the sector falling 1.4% by Wednesday afternoon.
German defence group Rheinmetall fell more than 18% after the country scrapped plans to build its biggest warship since World War Two and said it intended to buy eight smaller frigates from rival TKMS.
The German Armed Forces are KNDS's largest customer.
Ownership Structure: Germany and France
Equal Stakes for Germany and France
EQUAL STAKES FOR GERMANY AND FRANCE
Germany and France will hold a 40% stake each in KNDS after the listing, the company said.
The arrangement is part of Berlin's effort to preserve parity with the French state following the IPO.
Board Representation and Shareholding Agreement
Germany and France have agreed that, over the next 10 years, they may only reduce their shareholdings to below 30% with the other party's consent.
As long as they remain above the 30% mark, they may each appoint three members to the KNDS board of directors. Both countries must agree on important decisions within the board.
KNDS was created in 2015 through the merger of France's Nexter and Germany's Krauss-Maffei Wegmann.
Additional Information
($1 = €0.8820)
(Reporting by Maria Rugamer, Florence Loeve and Mathieu Rosemain; Editing by Matt Scuffham and Milla Nissi-Prussak)
