German State Matches French Stake in KNDS as Defence Group Pursues Auto Plant Conversions
27.05.2026 - 18:05:47 | boerse-global.de
The tank maker behind the Leopard 2, KNDS, is putting the finishing touches on an unusual expansion strategy just weeks ahead of its planned dual listing in Frankfurt and Paris. While the group’s €33.1bn order backlog provides the firepower for a high-profile IPO, it is the hunt for idle car factories that has captured the market’s attention.
CEO Jean-Paul Alary confirmed on 26 May 2026 that KNDS is in concrete talks with Mercedes-Benz and Volkswagen about using their underused plants in Ludwigsfelde and Osnabrück to manufacture military vehicles. Both sites have suffered from the shift to electric mobility and intensifying competition, leaving production lines empty. For KNDS, repurposing existing capacity is a shortcut to ramping up output without waiting for greenfield construction — a critical advantage as European defence orders surge.
The pivot comes as the German government locks in a 40% anchor stake in the group, matching the French state’s holding. The parity between Berlin and Paris is now sealed, giving both capitals equal voting rights and joint industrial control. KNDS, which also produces Caesar howitzers, is valued at roughly €20bn. Both governments plan to reduce their stakes to 30% within two to three years after the listing, a move that will leave the voting parity untouched.
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That listing is underpinned by a record financial performance. Revenue rose 15.9% in 2025 to €4.4bn, while operating profit jumped to €661m from €500m, pushing the EBIT margin to 15.0%. The ammunition division was the star performer, with sales climbing 24.7% to €612m. The land systems business showed a split: German operations generated €2.5bn, up 17.4%, while French operations added €1.3bn, a 9.6% gain. New orders worth €13.5bn flooded in during the year, lifting the total order book from €23.5bn to €33.1bn. More than 300 Leopard 2 A8 tanks are on order for the Czech Republic, the Netherlands and Croatia, and demand for Caesar howitzers is accelerating.
Parallel to the IPO preparations, KNDS is pushing ahead with international expansion. On 26 May, its Belgian subsidiary signed a cooperation agreement with Ukraine’s defence industry to set up production of medium-calibre ammunition, used against light armoured vehicles and aerial targets. The memorandum also covers maintenance and repair of combat modules. KNDS plans to retrofit existing sites rather than build from scratch, betting on a flexible model that can scale up faster to meet wartime demand.
A lingering regulatory hurdle has also been cleared. The company completed an independent investigation into a 2013 transaction with Qatar’s armed forces, and the board gave the green light on 26 May to finalise the 2025 annual accounts — a prerequisite for investor confidence ahead of the summer flotation. With the appointment of former Renk finance chief Christian Schulz to the executive board, KNDS says it is “One KNDS” and ready for public markets.
Chairman Tom Enders welcomed the German state’s participation but stressed the longer-term goal of reducing government influence and building a governance structure befitting a listed defence contractor. The Wegmann family, previously a major shareholder, also plans to offload part of its holding in the market debut. KNDS currently supplies more than 40 armed forces worldwide and employs around 11,000 people.
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