KNDS Talks to Mercedes and VW About Using Idle Auto Plants to Feed €33bn Backlog Ahead of May IPO
27.05.2026 - 13:23:37 | boerse-global.de
The Franco-German defence group KNDS is pushing ahead with its summer 2026 stock market debut while simultaneously scouring Europe for spare industrial capacity to build tanks and howitzers. Chief executive Jean-Paul Alary has confirmed direct negotiations with both Mercedes-Benz and Volkswagen over the potential use of two underutilised vehicle factories — a move that signals the company’s production challenge is now as critical as its order book.
With a record €33.1bn backlog at the end of 2025 — up from €23.5bn a year earlier — KNDS cannot afford to wait for greenfield construction. Instead, it is pursuing what Alary called “industrial conversion”, targeting existing sites that have lost work as the automotive sector shifts to electric vehicles. The most advanced discussions are with Mercedes over its Ludwigsfelde plant, while Volkswagen’s Osnabrück facility has also been approached. Alary said further details would be released in the coming weeks and months.
The urgency is backed by numbers from 2025. Revenue climbed 15.9% to €4.4bn, while operating profit (EBIT) rose from €500m to €661m, yielding a margin of 15.0%. The ammunition division was the fastest-growing segment, with sales jumping 24.7% to €612m. Land Systems Germany improved 17.4% to €2.5bn, and Land Systems France gained 9.6% to €1.3bn.
Should investors sell immediately? Or is it worth buying KNDS?
New orders came in at €13.5bn for the year, driven chiefly by the Leopard 2 A8 battle tank. More than 300 units are currently on order from the Czech Republic, the Netherlands and Croatia. Demand for the Caesar howitzer has also accelerated, feeding the wider European rearmament push.
KNDS has already tested its conversion strategy. It secured the Görlitz site through a framework agreement with Alstom and delivered first parts late last year. In Belgium it launched an automated production line for 155mm ammunition to meet rising NATO requirements.
The planned dual listing in Frankfurt and Paris remains on track for May 26, subject to market conditions. The German government intends to acquire a 40% stake at the IPO to match France’s long?held position, with both states planning to reduce their holdings to 30% over two to three years. The founding Wegmann family, until now the largest shareholder, will also sell part of its stake at the market debut. Analysts value the group at around €20bn.
For investors, the key question is shifting from pure order momentum to delivery credibility. A record backlog is of limited use if production bottlenecks prevent it from translating into revenue. Alary’s ability to lock in external factory capacity — and then manage those sites without losing operational control — will be a central test of the IPO narrative. The next confirmed announcement on capacity partnerships is likely to carry more weight for future shareholders than another order book update.
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