The German government is planning to buy a 40 percent stake in KNDS, buying out a private German firm—and giving certain outsiders a chance to invest as well.

KDNS, a Franco-German defense conglomerate best known for manufacturing both the main battle tanks and self-propelled artillery for France and Germany, will soon have a new product for sale: stock.

The defense company plans to sell 20 percent of the company to investors on the Paris and Frankfurt stock exchanges for the first time. The German government also intends to purchase a 40 percent share from one of the primary owners, according to Defense Minister Boris Pistorius, who on Friday announced that the Bundestag’s budget committee had approved the plan.

Wegmann & Co., a private German firm, and the French government-owned GIAT Industries currently own the entirety of KNDS. The German government will buy its 40 percent share from Wegmann, Pistorius said, allowing a group of German heirs to cash out of their ownership of half the company. This, combined with the sale of 20 percent of the company to private interests, will give the French and German governments a controlling interest.

Notably, while the Frankfurt and Paris exchanges will list the shares, the company will not offer a public sale. A KNDS media release noted that the IPO “is expected to consist of private placements to institutional investors in various jurisdictions,” and the stock would not become available for a general audience.

Germany’s Investment in European Defense Is a Smart Move

The German government will purchase its stake via an acquisition by the Kreditanstalt für Wiederaufbau (Credit Institute for Reconstruction), a state-owned institution which is among the world’s leading investment and development banks. That acquisition will be finalized before the share listing.

“Germany’s intention to invest alongside the French state is a strong signal of confidence in KNDS and its future,” KNDS chairman Tom Enders said of the sale, according to the release.

Enders’ optimistic assessment seems accurate. In 2025, KNDS posted sales of €4.4 billion ($5 billion), with an operating profit of €661 million ($753 million). The company showed a record order backlog of €33.1 billion ($37.7 billion) at year’s end.

KNDS’ performance is part of a skyrocketing defense industry stock trend since the onset of the Ukraine conflict in 2022. Several major defense firms issued initial public offerings during that time, including German tank transmission manufacturer Renk, German shipbuilder TKMS, French night-vision maker Exosens, and arms company Czechoslovak Group. The STOXX Europe Targeted Defence Index, an index fund of major European defense manufacturers, has increased sixfold since the invasion. 

KNDS Is Doing Brisk Business in Europe

Joint French and German control of KNDS makes sense as the company is a lead partner, along with Rheinmetall, in the effort to replace both nations’ main battle tanks, the French Leclerc and the German Leopard 2. The CAPINT, the company’s intermediate proposal to replace the fast-aging Leclerc, features a French turret and gun mounted on a Leopard 2 chassis. Ultimately, the CAPINT will in turn be phased out by the planned Main Ground Combat System (MGCS), which will equip both nations’ armored forces upon its completion.  

Each nation’s investment stake in KNDS is protected by a 10-year lockup period carrying certain guarantees. Any sale of KNDS shares during that period that would reduce the stake of either GIAT Industries or Kreditanstalt für Wiederaufbau to less than 30 percent would require prior approval by both parties.

The company also plans a loyalty incentive plan under which shares that are held by registered owners for two years will be granted double voting rights, thus promoting further stability.

The French government’s press release praised the sale, stating that the agreement’s core principles are “a long-term shareholder commitment, parity in governance rights, and appropriate oversight of security matters.” In keeping with Europe’s increased defense commitments, it also noted several objectives, namely “supporting the paramount surge in European demand – particularly that of the German and French armies – according to their respective requirements,” and “becoming a competitive and assertive player in the European defence market.”

About the Author: William Lawson

William Lawson is a military historian focusing on World War II and 20^th century conflicts and the American Civil War. His specialty is operational level warfare, especially American amphibious doctrine. He writes on history, politics, and firearms for multiple publications and historical journals. He serves on the editorial advisory board for the Saber & Scroll Journal and Military History Chronicles and is a member of the Society for Military History and the American Historical Association. Lawson is based in Virginia.

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