France and Germany commit to equal shareholding in KNDS as potential IPO nears

BELFAST — France and Germany finalized an agreement today that sets the two countries up to become equal shareholders in European defense prime KNDS.

In a joint statement, Berlin and Paris said that by inking the framework pact, they have taken “a decisive step towards strengthening their common sovereignty in land defence.”

France holds a 50 percent stake which is expected to be reduced to 40 percent. Germany is seeking an identical stake, subject to approval by its budget committee, according to a separate statement today from government spokesperson Stefan Kornelius. He also said that the German government plans on reducing the scope of its stake at a future date.

Key principles of the Franco-German pact cover a “long-term shareholder commitment, parity in governance rights, and appropriate oversight of security matters.”

“The agreement also paves the way for a possible IPO [Initial Public Offering] of KNDS in the near future,” added the Franco-German statement. The potential, multi-billion dollar stock launch could go ahead as soon as tomorrow, according to Bloomberg.

The proposed future governance change represents a “significant milestone” since the manufacturer’s formation in 2015, authorities in Berlin and Paris said. Formed through a joint venture between France’s Nexter Systems and Germany’s Krauss-Maffei Wegmann (KMV), the company is well known for production of Leopard 2 and LeClerc main tank battles, as well as a broad range of infantry fighting vehicles, armored personnel carriers, uncrewed ground systems and turrets.

At its core, the ambition of the Franco-German agreement is aimed at developing KNDS into a “leading European and global defence company serving the French and German armed forces, and to strengthen its competitiveness in the European land systems industry,” said the statement.

To honor this ambition, six objectives have been agreed to, including supporting a “paramount surge” in European defense equipment demand — especially from home nations — introducing “technical and commercial synergies” across existing and future product lines, and strengthening Europe’s supply chain.

Separately, KNDS announced today that it has completed a first delivery of 110 Stridsvagn 123 A modernized Leopard 2 main battle tanks to the Swedish procurement agency FMV.