KNDS Presses On with Leopard 2 Production Ramp-Up as €15bn Dual Listing Derailed by Owner-Investor Price War
Published on 07/03/2026 at 08:52 | Redaktion boerse-global.de
The German-French defence group KNDS is ploughing ahead with factory expansions and a record €33bn order backlog even as it abandons its much-anticipated dual listing in Frankfurt and Paris. The maker of the Leopard 2 battle tank pulled the IPO on Thursday, blaming market volatility in the European defence sector, but the real obstacle was a bitter valuation tussle that exposed a €500m chasm between what owners would accept and what investors were willing to pay.
Initial hopes of a €20bn valuation evaporated as the defence stock rally faltered. Management eventually targeted around €15bn, but the selling shareholders — Giat Industries of France and Germany’s Wegmann & Co — insisted on a minimum €12.5bn price tag. Large institutional investors drew a hard line at €12bn, refusing to budge. The stalemate forced the cancellation of what would have been one of Europe’s biggest defence listings this year.
Government entry stalled alongside IPO
Berlin’s plan to take a 40% stake via state development bank KfW was contingent on the IPO pricing. The government intended to buy the Wegmann family’s block for up to €7.2bn, a transaction that now cannot proceed. Lawmakers on the budget committee described the delay as a serious setback, stalling the federal government’s ambition to anchor itself in a key defence supplier at a time when NATO is demanding faster rearmament.
The eventual share structure that triggered investor wariness would have left minority holders with just 20% of the capital. After the listing, both the French state (through Giat Industries) and the German government (via KfW) would have each retained 40%. Analysts pointed out that free float of only €3bn in a dual-controlled company would give ordinary shareholders virtually no say in strategic decisions.
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Czech rival sheds 44% and darkens mood
Market conditions have turned sharply sour for the defence sector. The initial euphoria that lifted stocks on promises of soaring European military budgets has given way to doubt about how quickly higher spending will translate into earnings. The Czechoslovak Group (CSG), which listed in Amsterdam in January, has already lost 44% of its value, falling to a market capitalisation of €13.8bn. Rheinmetall, a bellwether in the sector, dropped 13% over the past month.
The secondary article notes that KNDS’s free cash flow hit a robust €980m in the last financial year, with revenue climbing to €4.4bn and operating profit reaching €661m. At a €15bn valuation, the stock would have traded at 23 times operating earnings — a multiple that looked stretched against a cooling sector backdrop.
Production push continues regardless
Operationally, KNDS shows no sign of slowing. The company’s order backlog cleared €33bn, underpinned by the German military’s plans to buy up to 1,000 Leopard 2 tanks and 2,500 GTK Boxer armoured vehicles in a procurement programme worth roughly €25bn. To meet those volumes, KNDS is expanding capacity at its Munich flagship plant, which currently churns out about 50 tanks a year with delivery times of around two years. The company has already bought the former Alstom factory in Görlitz, where production is scheduled to begin in 2026.
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The expansion moves ahead independently of the IPO delay. Morningstar analyst Michael Field said he does not expect a fresh listing attempt before the end of the year, demanding further strong quarterly results across the defence sector to rebuild confidence. The company itself says it will “immediately resume” the process when market conditions improve, and it still aims for a 20% free float with both states holding 40% each. For now, KNDS is building tanks faster than investors and owners can agree on a price.
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