The market debut of the Franco-German defence champion KNDS may well be the most anticipated European flotation of the year, but it is unfolding against an unusual backdrop: the company is struggling to build the weapons it has already sold, while politicians on both sides of the Rhine are squabbling over control. The dual listing in Frankfurt and Paris is expected to raise €5bn, yet the valuation corridor has already been trimmed to €18–20bn from earlier whispers of €25bn, as Berlin insists on sweeping veto rights and a 40% stake via the state-owned KfW.
The order book tells a story of extraordinary demand. At the end of last year, KNDS sat on a record backlog of €33.1bn, with annual sales of €4.4bn and margins improving. To chew through that mountain, management has taken the unusual step of negotiating with Volkswagen and Mercedes-Benz to take over mothballed car plants in Osnabrück and Ludwigsfelde. In Norway, a new assembly hall can now roll out up to 36 Leopard 2 tanks a year, and an automated ammunition line in Belgium is feeding the artillery pipeline. The workforce has swelled to roughly 11,000.
None of that expansion, however, guarantees a smooth path to the stock exchange. The Bundesregierung has demanded far-reaching vetoes over personnel decisions, matching the French state’s existing blocking rights. That leaves free-float investors with only an estimated 20% of the shares when trading begins. The sell-side banks, led by Goldman Sachs and Deutsche Bank, have adjusted the valuation range accordingly.
On the product front, KNDS used this week’s Eurosatory arms fair in Paris to showcase its technological pipeline — a crucial signal for investors sizing up the company’s long-term growth. The star of the stand was the CAPINT main battle tank for the French armed forces, based on the Leopard 2 but with an unmanned turret and a 1,500-horsepower engine; first deliveries are slated for the 2030s. Nearby, the LORAS artillery system drew crowds with its promise to strike targets 100 kilometres away using special munitions, more than double the range of standard howitzers.
Should investors sell immediately? Or is it worth buying KNDS?
Digital warfare is also becoming a differentiator. KNDS presented a universal drone-launch container that integrates jamming systems from TYTAN and AI-controlled combat drones from Helsing. To connect it all, the company is partnering with Nokia to install a secure 5G network inside armoured infantry vehicles, enabling real-time data exchange between soldiers and unmanned systems.
The IPO timetable has slipped. Originally pencilled for this summer, the flotation is now expected in September, according to banking sources. Two key obstacles have been cleared: an internal probe into an old Qatar deal found no evidence of criminal activity, and the European Commission formally opened its merger-control review in early June, allowing KNDS to publish its securities prospectus.
Beyond Europe, the group is already eyeing a major U.S. Army artillery programme alongside Leonardo DRS. A first decision on that contract is due in July 2026. For now, though, the immediate challenge for KNDS is proving to the market that it can produce faster than its politicians can argue — while keeping the promise of a €5bn payday alive.
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