KNDS is in advanced talks to acquire or lease manufacturing sites from Volkswagen and Mercedes-Benz, signalling an urgent push to expand production capacity ahead of a dual listing in Frankfurt and Paris. Chief executive Jean-Paul Alary confirmed the negotiations on the sidelines of the ILA Berlin air show, placing the acquisition of automotive factories at the heart of the group’s industrial expansion strategy.
The two plants under consideration are Volkswagen’s assembly facility in Osnabrück and Mercedes-Benz’s site in Ludwigsfelde near Berlin. KNDS plans to initially rent parts of the Ludwigsfelde plant to build chassis for military vehicles while civilian van production continues. A full takeover could follow once the commercial vehicle manufacturing lines are wound down in 2027. The logic is straightforward: automotive workers already possess the precision manufacturing skills that translate directly to armoured vehicle production.
Underpinning the IPO story is a record order backlog that has surged 41 per cent over the past year from €23.5bn at the end of 2024 to €33.1bn. The growth is powered by flagship programmes including the Leopard 2A8 main battle tank, the CAESAR artillery system, and the Boxer armoured vehicle family. Banks have valued the group at between €20bn and €25bn, with the listing expected in late June or July 2026. Around a quarter of the shares will be floated, accompanied by a capital increase to finance industrial expansion.
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Ownership of the group is being reshuffled ahead of the market debut. The German government, through state-owned lender KfW, is seeking to acquire a 40 per cent stake to match the reduced holding of the French state. Both countries currently own roughly equal shares, but the German side has been a minority partner via the Wegmann family, which is now planning a full exit. KfW has hired JPMorgan to advise on the purchase, while Lazard is managing the IPO. Tom Enders, KNDS’s chairman, said both governments intend to reduce their stakes to around 30 per cent each within two to three years of the listing, maintaining parity.
Before new shareholders come on board, the existing owners are set to extract a hefty dividend. The board is discussing a special payout of up to €2bn, which would flow to the French state and the Wegmann family. Proceeds from the IPO will be directed toward further capacity expansion and technology investment, with exact terms of the share placement expected in the coming weeks.
Alongside the factory push, KNDS is making a case for a premium valuation by positioning itself as a system integrator rather than a pure platform maker. At the ILA show, the group highlighted the integration of its 20mm NC621 weapon pod into the Bundeswehr’s H145M light attack helicopter, with live firing tests scheduled for mid-June 2026. The message to investors is clear: KNDS is selling networked combat systems, not just tanks and howitzers.
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