KNDS Sprints for Summer Listing as Governments Take 80% and Defense Budgets Surge

KNDS plans June/July IPO in Frankfurt and Paris with state ownership at 80% and valuation up to €20bn. Special dividend, Renk sale, and rising defence budgets bolster investor case.

The defence group KNDS is heading for a dual listing in Frankfurt and Paris under ownership terms that few IPO-bound companies ever face. Germany and France will together hold 80% of the equity, leaving just one-fifth of the shares for public investors once the float goes ahead in June or July.

Berlin confirmed last week that KfW, the state-owned development bank, will acquire a 40% stake for around €8bn, matching the French government's existing holding. Government spokesperson Susanne Ungrad said the move was designed to protect sensitive defence technology and align Germany’s influence with that of France. The private Wegmann family, which had owned the German side of the business, is using the listing as its exit.

Financial advisers JPMorgan and Lazard have pegged the group’s total valuation at between €18bn and €20bn. A special dividend of up to €2bn for existing shareholders is also under discussion ahead of the IPO, adding a potential sweetener before the stock goes public.

Operationally, KNDS has been tidying up its balance sheet and sharpening its product story. In a block trade just before the float, it sold 5.8 million shares of drive specialist Renk at €45.10 each, raising roughly €262m. Renk’s stock has since eased to around €47.90, but the proceeds give KNDS extra liquidity as it prepares the equity narrative for investors. Renk itself remains on solid footing: its first-quarter order intake hit €582m and the backlog stood at €6.9bn.

Another operational milestone came from the German cartel office, which cleared the 50/50 joint venture between KNDS Deutschland and Elbit Systems Land. The new entity, EuroPULS GmbH, will be based in Kassel and focus on the EuroPULS rocket artillery system, covering marketing, maintenance and technical support across the full lifecycle. For a company selling to a rising defence market, predictable service revenue strengthens the case for long-term investors.

That market is expanding fast. Foreign Minister Johann Wadephul confirmed on 23 May that Germany is targeting defence spending of 4% of GDP this year and 5% by 2035. The special defence fund has grown to €500bn, according to a constitutional rights report released on 22 May. Such sums underpin large-scale procurement programmes and give manufacturers like KNDS multi-year visibility.

Talks on long-range missiles with a range of more than 2,000km are scheduled for June between Germany, Britain and France. A possible sale of up to 40 Eurofighter jets to Turkey has also not been blocked by the outgoing transitional government and could be finalised under the new administration led by Friedrich Merz.

The calendar is tightening. Renk’s annual general meeting is set for 10 June, and the final PwC audit report on KNDS’s earlier business activities in Qatar is nearing completion. That audit is one of two factors that could delay the IPO. The other is the ongoing conflict surrounding Iran. If either creates a snag, September 2026 is the fallback window.

The limited free float of 20% is the main structural constraint for institutional money. A float that small typically keeps a stock out of major indices and depresses trading liquidity. Both governments have signalled they plan to reduce their holdings to 30% each within two to three years, which would expand the public float to 40% — provided the political will holds.

KNDS, formed in 2015 from the merger of Krauss-Maffei Wegmann and Nexter, brings an order backlog of around €23.5bn to the market. Its product line-up includes the Leopard 2 and Leclerc main battle tanks as well as the Caesar artillery system. With state backing locked in and a defence spending super-cycle underway, the IPO is less about finding demand and more about clearing the final procedural hurdles.