The German government said Monday that it intends to take a 40% stake in defense contractor KNDS, whose products include Leopard and Leclerc tanks, as it tries to strengthen European production along with NATO ally France.
The French state already has a 50% stake in KNDS, which was formed in 2015 with the merger of Germany's Krauss-Maffei Wegmann and France's Nexter. The other half is held by the German family behind Krauss-Maffei Wegmann.
Headquartered in Amsterdam, KNDS had 4.4 billion euros ($5 billion) in revenue last year and more than 11,000 employees.
European countries are moving to ramp up their defense spending and production and boost their military ranks as they contend with Russia’s war in Ukraine and concerns about the United States’ unpredictability.
The German government said its planned stake “will secure long-term influence on a company that is strategically significant for European security and defense capability.” It added in a statement that “national industrial value creation, as well as technological sovereignty and the protection of security interests and key technologies in Germany" also will be strengthened.
A separate joint statement said that the German and French governments have reached an agreement on the strategy and governance of KNDS, “of which they intend to become joint shareholders through transactions aiming at equal shareholding levels for both countries.”
It didn't specify when that will happen or what level the countries' stakes will ultimately settle at, but said the accord paves the way for a possible IPO of KNDS in the near future.
The two governments said their agreement “reflects the shared determination of France and Germany to strengthen Europe’s industrial and defense capabilities, support their armed forces, and strengthen European sovereignty over the long term.”
Beside the tanks, KNDS' products also include Puma infantry fighting vehicles and Boxer and Dingo armored personnel carriers.
