KNDS Explores Factory Reuse with Mercedes and VW as Record Orders Drive Expansion Plans
27.05.2026 - 15:03:18 | boerse-global.de
The defence group behind the Leopard 2 tank and Caesar artillery system is in talks with two of Germany’s biggest carmakers to repurpose idle production lines for military vehicles. Chief executive Jean-Paul Alary confirmed on 26 May 2026 that KNDS is negotiating with Mercedes-Benz over its Ludwigsfelde plant and with Volkswagen over its Osnabrück site – both of which have suffered from the shift to electric vehicles and intensifying competition. Rather than building new manufacturing capacity from scratch, the group hopes to bolt its military vehicle production into existing auto plants, accelerating the ramp-up to meet an unprecedented surge in orders.
That order surge is staggering. KNDS booked a record €13.5 billion in new business during 2025, lifting the total order backlog to €33.1 billion – up from €23.5 billion at the end of 2024. The bulk of the orders came from Leopard 2 A8 purchases: more than 300 units are currently on order for the Czech Republic, the Netherlands and Croatia, while demand for Caesar howitzers is also climbing sharply.
The revenue picture reflects the gathering momentum. Sales rose 15.9% to €4.4 billion in 2025, with the ammunition division posting the strongest growth at 24.7% to €612 million. Land Systems Germany, the largest segment, generated €2.5 billion – a 17.4% increase – while the French division advanced 9.6% to €1.3 billion. Operating earnings (EBIT) climbed to €661 million, pushing the margin to 15.0% from 13.2% a year earlier, while net profit doubled to €996 million.
Should investors sell immediately? Or is it worth buying KNDS?
The expansion push comes as KNDS finalises plans for a dual-listing in Frankfurt and Paris, expected in 2026. The French state will retain control for now, but the German government intends to acquire a 40% stake at the IPO, matching the French holding. Both countries plan to reduce their stakes to 30% within two to three years after listing. The Wegmann family, which has been a major shareholder, also plans to sell part of its position at the market debut.
For investors, the autumn of 2026 will be a key test – that is when the first quarterly results as a listed company are due. With a €33.1 billion order book and a novel strategy to borrow idled auto plants rather than build them, KNDS is betting that Europe’s rearmament wave is more than a passing cycle.
Ad
KNDS Stock: New Analysis - 27 May
Fresh KNDS information released. What's the impact for investors? Our latest independent report examines recent figures and market trends.
