KNDS Clears Audit Hurdle and Scrambles for Factory Floor Space as Summer Dual Listing Approaches

Franco-German defense giant KNDS receives regulatory green light for June/July 2026 IPO, backed by €13.5B annual orders and plans to acquire Mercedes and VW factories.

The Franco-German tank and howitzer maker KNDS has passed the last regulatory checkpoint ahead of its planned June or July 2026 initial public offering in Frankfurt and Paris. An internal compliance probe into a 2013 contract involving activities in Qatar wrapped up without any criminal findings, and external auditors signed off — clearing the way for the publication of the final securities prospectus.

Behind the governance milestone lies a business that is growing faster than its own production lines can handle. Revenue jumped 15.9% in 2025 to €4.4bn, while operating profit hit €661m, lifting the EBIT margin to 15.0% from 13.2% a year earlier. But the real story is the order intake: €13.5bn in a single year, pushing the total backlog to €33.1bn — more than seven times annual sales and enough to keep factories running at full tilt for years.

That mountain of work has prompted KNDS to look well beyond its own plants. The group is in advanced talks to take over Mercedes-Benz’s factory in Ludwigsfelde, near Berlin, where it would invest around €1bn to build assembly lines for the Boxer armoured wheeled vehicle. During a transitional phase, civilian car production and military work would run side by side. From 2030, KNDS could take full control of the site, bringing roughly 2,000 auto-sector workers into the defence industry. Separately, the company is also bidding for Volkswagen’s Osnabrück plant, where passenger-car output ends in 2027.

The need for extra capacity is underlined by a landmark British order for 72 RCH 155 self-propelled howitzers, worth around £1bn, with first deliveries scheduled for 2028. KNDS already supplies more than 40 armed forces worldwide, and European demand for heavy weapons platforms and ammunition shows no sign of slowing.

The three business divisions all grew in 2025, albeit at different rates. The German land-systems arm posted a 17.4% sales increase to €2.5bn, while its French counterpart rose 9.6% to €1.3bn. The ammunition segment was the standout, surging 24.7% to €612m, reflecting the continent-wide push to rebuild munitions stockpiles.

The IPO will be accompanied by a revamped supervisory board. Christian Schulz, a former chief financial officer of the Renk Group, joined at the start of 2026 to bring capital-markets experience to the transition.

What makes the listing unusual is the ownership structure. Germany, via the state development bank KfW, will buy a 40% stake for roughly €8bn, matching France’s existing 40% holding. Both governments intend to reduce their positions to about 30% apiece within two to three years after the float, but for now the dual-state anchor ensures that the maker of the Leopard 2 tank and Caesar howitzer remains under tight political control. With the compliance box ticked and a record order book to back it, KNDS is heading for a summer that could reshape the balance of power in European defence manufacturing.