France and Germany have locked in an equal 40% stake each in KNDS, removing the final political obstacle to one of Europe’s most anticipated defence IPOs. The dual listing in Frankfurt and Paris is still on track for July, but the German parliament’s budget committee must first give the green light on Wednesday for Berlin’s entry — a vote that has become the single most critical near-term catalyst for the shares.
Under the deal, France cuts its previous 50% holding while Germany becomes a new investor for the first time. The two governments will hold equal voting rights regardless of their future stake size, and both intend to reduce their positions to around 30% over two to three years after the IPO. That leaves a free float of roughly 20%, tightly held and unlikely to expand quickly. Germany has also demanded a golden share in the German subsidiary KNDS Deutschland, securing veto power over strategic decisions and senior appointments.
The political choreography is only half the story. Operationally, the company faces a brewing rift in its flagship Franco-German tank project, the Main Ground Combat System (MGCS). Just €25 million has been poured into the programme so far, and Rheinmetall chief Armin Papperger has warned that Paris is mulling a deep funding cut. KNDS responded at the Eurosatory trade show in mid-June by unveiling the CAPINT, a hybrid that marries a German Leopard chassis with a French turret system. Meanwhile, German partners are pushing ahead with the Leopard 3 as a backstop.
None of that uncertainty has dented the financials. Revenue rose 16% last year to €4.4 billion, operating profit hit €661 million, and the order backlog stands at €33.1 billion — a staggering 7.5 times annual sales. New orders worth €13.5 billion landed in 2025 alone, far outstripping production capacity. The ammunition business is booming across Europe, and the company is racing to convert factories to keep pace.
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An even bigger prize could be within reach across the Atlantic. KNDS, together with Leonardo DRS, is bidding to supply the US Army with its CAESAR howitzer system. Ukraine already fields 120 of the guns, and the Pentagon is expected to decide on prototype contracts in July. A win would completely reset the valuation of the IPO-bound group, which analysts currently peg at €15 billion to €20 billion.
Despite the progress, the timetable remains tight. The budget committee’s approval is not the only loose end. An agreement with the Wegmann family, a key shareholder, is still outstanding, and several regulatory clearances for the listing have yet to land. The European Commission has already waved through the German entry on competition grounds, but any further delays could push the IPO beyond July.
Katherina Reiche, Germany’s economic affairs minister, described the state’s 40% holding as a means to safeguard “key technologies, industrial value-added and jobs in Germany.” Jean-Paul Alary, KNDS’s chief executive, welcomed the pact as confirmation of the group’s “strategic importance for Europe’s defence capability.” With the vote now days away, the summer listing is within touching distance — provided Berlin’s politicians deliver on time.
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