€23bn Backlog and No Factory: KNDS Scrambles on Three Fronts Ahead of IPO

Tank maker KNDS aims for €23bn IPO but faces audit delays, production line shortages, and Franco-German ownership disputes that could close the summer window.

KNDS has a record order book worth more than €23bn and plans one of Europe’s biggest stock market debuts this summer. But the tank maker cannot ship its vehicles until it secures new production lines, its auditors refuse to sign off the accounts, and Berlin and Paris cannot agree on how much of the company they should own. The next few weeks will determine whether any of these logjams can be cleared before the late-summer IPO window closes.

The most immediate hurdle is a formal one. PwC, the company’s auditor, has yet to issue a testate for the 2025 balance sheet because KNDS is conducting an internal review of a decade-old contract with Qatar. The deal, struck in 2013, is being scrutinised for any irregularities, although internal checks have so far found no evidence of misconduct. Without audited numbers, no prospectus can be published. Chief executive Jean-Paul Alary insists the summer timetable remains achievable if the testate arrives by the end of May. A delay into the autumn is the fallback.

Parallel to the audit impasse, KNDS is racing to find space to manufacture the army of Boxer armoured vehicles and Leopard 2 tanks it has committed to deliver. A key target is the Mercedes-Benz plant in Ludwigsfelde, outside Berlin, where Sprinter chassis are currently built. KNDS is negotiating a lease that would initially share the site with civilian production, with an option to take over the entire factory later. The investment needed to convert the plant for military use is estimated at roughly €1bn. A potential Bundeswehr order for 3,000 Boxer wheeled vehicles hangs in the balance.

A fallback is the Volkswagen site in Osnabrück, where car assembly is scheduled to end in 2027. But KNDS faces competition there: Israel’s Rafael Advanced Defense Systems signed a letter of intent for the facility back in April. Talks with both automakers are advancing, and the company’s ability to expand will be a central test of the IPO narrative.

Ownership remains a political minefield. KNDS is currently split between the French state and the German Wegmann family. The family wants out, and the German government has submitted a formal offer for a stake of between 30% and 40%. But Berlin’s coalition partners disagree on the precise figure. Vice-Chancellor Lars Klingbeil and Defence Minister Boris Pistorius back a 40% holding for Germany, with France taking an equal slice to keep strategic parity. CDU budget politician Andreas Mattfeldt favours a thinner 30-30 model. The chancellery is reportedly leaning towards a smaller, Airbus-style public stake.

Adding another layer of complexity, the Czech defence group CSG has publicly signalled interest in buying into KNDS. Sources close to the talks say the offer is viewed sceptically in both Paris and Berlin, given the strategic sensitivity of Europe’s main tank builder. Jefferies analysts rate the Czech bid’s chances as slim.

Banks working on the listing have trimmed their valuation expectations to a range of €18bn to €20bn, down from earlier whisper figures of up to €22bn. That would still make KNDS one of the largest European defence floats this year, though it will trade at a discount to rival Rheinmetall. The coming weeks will reveal whether the audit can be cleared, a factory secured, and a political compromise forged — all before the summer window shuts.