KNDS Marches Toward €20bn IPO with Swiss DONAR Contract and KfW's 40% Entry

Franco-German defence group KNDS signs CHF-denominated howitzer contract with Switzerland and restructures ownership for a planned €20B dual IPO in mid-2026.

The Franco-German defence group KNDS is juggling a pair of defining events: a CHF-denominated artillery contract with Switzerland that validates its product roadmap, and a state-engineered ownership revamp that clears the path for one of Europe's largest ever defence listings. Taken together, they paint a picture of a company that is simultaneously securing long-term production visibility and restructuring its capital base to meet investor expectations.

Switzerland's procurement agency armasuisse has signed a firm order for 32 DONAR wheeled howitzers, with KNDS acting as prime contractor. The systems will be mounted on the proven Piranha chassis, supplied by subcontractor GDELS-Mowag, and will replace the Swiss army's ageing M109 fleet. The DONAR's unmanned turret and automatic loader allow a crew of just two to operate the 155 mm gun, which can engage moving land and sea targets across a full 360-degree arc before rapidly relocating to avoid counter-battery fire. Delivery is not expected until 2031, following a prototype build in 2027 and qualification in 2028, but the package includes ammunition, simulators and spare parts — a standard KNDS approach to locking in aftermarket revenue.

While the Swiss deal bolsters an already bulging order book — KNDS reported order intake of €13.5 billion for 2025 — the bigger story is unfolding in the boardroom. The group is preparing a dual listing in Frankfurt and Paris, targeted for June or July 2026, with Lazard appointed as lead adviser and a banking syndicate of Bank of America, Deutsche Bank, Goldman Sachs and Société Générale. The valuation target is up to €20 billion, a figure that will test how much appetite investors have for a defence champion whose governance remains tightly intertwined with state interests.

KfW, Germany's state-owned development bank, is buying a 40% stake in the German side of the business, advised by JPMorgan. That move is designed to create parity with the French state, which already holds a comparable position, and ensure continued government influence over the maker of the Leopard 2 tank and Caesar howitzer. Before the listing, existing owners — including the French state and the German Wegmann family — are examining a special dividend of between €1 billion and €2 billion, effectively a final cash extraction from the private holding.

The financials for 2025 provide solid ammunition for the IPO prospectus. Revenue rose 15.9% to €4.4 billion, while operating profit climbed to €661 million, yielding a 15.0% margin. The ammunition division was the standout performer, with sales up 24.7% as European nations restock depleted arsenals. KNDS plans to channel free cash flow and IPO proceeds into expanding production capacity, particularly in Germany.

Internal compliance checks were completed in early June, and with the Swiss order now under contract, the company has a concrete operational narrative to present to potential investors. If the timetable holds, trading in KNDS shares begins before the end of July 2026.