Germany Plans to Acquire 40% Stake in Defense Contractor KNDS

The German government is planning to acquire a 40% stake in the defense contractor KNDS. This company produces the Leopard and Leclerc tanks. The move aims to strengthen European production alongside France, Germany’s NATO ally, as announced on Monday.

Currently, the French state holds a 50% stake in KNDS. The company was formed in 2015 following the merger of Germany’s Krauss-Maffei Wegmann and France’s Nexter. The remaining ownership belongs to the German family behind Krauss-Maffei Wegmann.

Headquartered in Amsterdam, KNDS achieved revenues of 4.4 billion euros (5 billion dollars) last year and employs over 11,000 people. European countries are boosting their defense expenditure and production while dealing with the ongoing war between Russia and Ukraine and concerns about the unpredictability of the United States.

The German government stated that its proposed stake will “ensure long-term influence over a company strategically important for European security and defense capabilities.” It further noted in a statement that this move will enhance “national industrial value creation, technological sovereignty, and the protection of key security interests and technologies in Germany.”

A separate joint statement indicated that the German and French governments have agreed on the strategy and governance of KNDS. They plan to become joint shareholders with equal participation levels for both nations. Details regarding exact participation levels and timing were not disclosed, but the agreement paves the way for a potential KNDS public offering soon.

The governments emphasized that their agreement “reflects the shared determination of France and Germany to strengthen Europe’s industrial and defense capabilities, support their armed forces, and reinforce European sovereignty long-term.”

Besides tanks, KNDS products also include Puma infantry fighting vehicles and Boxer and Dingo armored personnel carriers.