Tankmaker KNDS puts off IPO citing tough defence market conditions
KNDS IPO Postponement and Market Analysis
By Maria Rugamer and Kanjyik Ghosh
July 1 (Reuters) - Franco-German defence group KNDS has put plans for a stock market listing on hold until market conditions improve, it said on Wednesday, shelving what would have been one of Europe's largest defence IPOs in recent years.
Background and Company Overview
KNDS said last month it planned to list shares in Frankfurt and Paris. A source told Reuters that the maker of the Leopard 2 tank and Caesar howitzer was likely to be valued at around €15 billion ($17.07 billion) in the IPO.
KNDS, formed through the combination of Germany's Krauss-Maffei Wegmann and France's Nexter, generated revenue of €4.4 billion in 2025 and ended the year with an order backlog of €33.1 billion.
Shareholder Structure and IPO Plans
The family owners and the French state, which each hold 50% of the shares, are expected to sell 10% each in the initial public offering.
The families intended to sell all their shares as part of the flotation, with Germany due to acquire a 40% stake and the remainder to be sold to institutional investors.
Valuation Disputes and Investor Sentiment
According to a report by the Financial Times, however, the German owner families are not prepared to accept a valuation of less than €12.5 billion, with some investors telling the firm that it could be worth less.
A company spokesperson had declined to comment on the FT report.
"KNDS and its shareholders will continue to monitor the capital markets conditions closely and stand ready to resume the IPO process as soon as market conditions allow," it said in its statement.
Market Conditions and Industry Impact
A Risky IPO as Defence Stocks Retreat
The decision marks a setback for one of the most closely watched European defence listings, coming as investors have cooled on a surge in defence stocks fuelled by expectations of higher military spending across NATO countries.
Performance of Rival Companies
Rival Rheinmetall, has seen its value plummet in recent days. Shares in the Czech defence group CSG, which has been listed in Amsterdam since the start of the year, are also trading well below their issue price.
Historical Precedents and Government Response
Before the postponement, a person familiar with the matter pointed to German defence supplier Renk, which shelved its IPO in 2023 before reviving the deal four months later as investor interest in defence stocks improved.
In a written response, the German government said it respected KNDS' decision to put its IPO on hold and remained committed to working with its French partners to secure the company's long-term future.
Additional Information
($1 = 0.8789 euros)
(Reporting by Kanjyik Ghosh in Barcelona, Maria Rugamer in Gdansk and Alexander Huebner in Munich; Additional reporting by Mathieu Rosemain and Holger Hansen; Editing by Chris Reese, Vijay Kishore and Stephen Coates)