Key facts
- KNDS, a Franco-German defence manufacturer, has announced plans for an IPO.
- The company intends to list shares in Paris and Frankfurt within weeks.
- The IPO is expected to value KNDS between €12bn and €15bn.
- Germany will acquire a 40% stake in KNDS, while France will also hold 40%.
- The remaining 20% of the company will be offered to the public.
- The listing capitalizes on increased European military budgets driven by the war in Ukraine.
Pan-European defence company KNDS has officially announced its plans for an initial public offering (IPO), aiming for a dual listing in Paris and Frankfurt within weeks. The move capitalizes on Europe's increased military spending, driven by the war in Ukraine and concerns over US security guarantees.
The IPO could value KNDS, the maker of Leopard and Leclerc battle tanks, at between €12bn and €15bn, according to the Financial Times. This potential valuation would make it one of Europe's largest defence listings in recent years. CEO Jean-Paul Alary stated the offering is expected within weeks, coinciding with a new era of defence and security in Europe.
The announcement follows Germany's plan to acquire a 40% stake in KNDS, which it considers strategically important. France, currently owning 50%, is expected to reduce its stake to 40%, with the remaining 20% to be floated on the stock market. Shares are anticipated to be marketed primarily to institutional investors.
The emergence of KNDS as a publicly traded entity adds pressure on its main competitor, Rheinmetall, Europe's largest ammunition maker. Rheinmetall's shares have fallen approximately 25% this year. The company reportedly hoped to acquire a stake in KNDS but was excluded due to government intervention. Further compounding Rheinmetall's challenges, Germany announced it would scrap the company's F126 frigate program in favor of smaller vessels from rival builder TKMS, leading to a 13% drop in Rheinmetall's shares.