KNDS Charges Toward €5bn IPO with Full Order Books, but Audit and State-Ownership Questions Loom

Franco-German defence group KNDS targets summer dual listing with €33.1bn order backlog, but state stake disputes and PwC audit over Qatar deal cut valuation to €18-20bn.

The Franco-German defence group KNDS is sprinting toward a summer dual listing in Frankfurt and Paris, backed by a record €33.1bn order backlog and a fresh Swiss howitzer contract. Yet the company must clear two intractable hurdles before it can price an initial public offering that the lead banks are now eyeing at an €18bn to €20bn valuation — well below the €20bn–€25bn range originally discussed.

On 8 June, Switzerland’s procurement agency signed a deal for 32 DONAR wheeled howitzers, with deliveries scheduled from 2031. That follows a nearly £1bn order in May from the UK for 72 RCH 155 automated howitzers, a system jointly developed with Rheinmetall. KNDS has also submitted bids for US and Canadian artillery programmes, positioning itself squarely inside the Pentagon’s procurement pipeline.

But the industrial momentum stands in stark contrast to the governance bottlenecks. The German government wants a 40% stake, though internal dissent has emerged: the defence ministry backs the full 40%, while the economics ministry and chancellery favour 30%. France is expected to take a similar stake, leaving a free float of just 20% — unusually thin for a group of KNDS’s scale. Institutional investors worry that the state’s de facto grip will drag on the valuation. The IPO’s mandated banks — Bank of America, Deutsche Bank, Goldman Sachs and Société Générale — have already trimmed their valuation band to €18bn–€20bn from an earlier €20bn–€25bn.

A parallel battle is playing out in the audit room. PricewaterhouseCoopers has refused to sign off on KNDS’s fiscal 2025 accounts until it sees the outcome of an internal probe into a 2013 weapons deal with Qatar. That contract, worth €1.89bn and covering howitzers, Leopard tanks, training and support, triggered allegations of million-euro commission payments. KNDS launched a new investigation in late April led by law firm Freshfields; no evidence of criminal behaviour has emerged, but PwC insists on waiting for the full findings. Without a clean audit opinion, there can be no prospectus, and therefore no IPO.

KNDS’s operating performance meanwhile tells a different story. Revenue climbed 16% in 2025 to €4.4bn, while the EBIT margin improved from 13.2% to 15.0%. Order intake surged to €13.5bn, filling the order book to 33.1bn — more than seven times annual sales.

That order pile is already straining production. CEO Jean-Paul Alary is in advanced talks with Volkswagen and Mercedes-Benz to acquire plants in Osnabrück and Ludwigsfelde. At the Mercedes site near Berlin, Boxer armoured vehicles would initially share assembly lines with Sprinter vans; longer term, KNDS aims to take over the entire factory. Roughly 2,000 workers could switch employers. Volkswagen chief Oliver Blume has called the Osnabrück discussions “promising”.

On the regulatory front, KNDS recently wrapped up a separate internal investigation into the same Qatar deal — the one that had previously blocked PwC’s approval — but the auditor still wants to see Freshfields’ latest conclusions. The IPO timetable remains fluid: June or July are the preferred windows, with September as a fallback. Every month of delay raises the risk that market conditions will shift before the dual listing can be completed.

For now, KNDS is a company where the production lines are running flat out, the order pipeline is the deepest in its history, and the biggest questions are not about demand — but about who will own the shares, and when the accountants will finally say yes.