Lazard Brings Firepower to KNDS’s €20bn IPO as Franco-German Showdown Looms

KNDS appoints Lazard for dual IPO in Frankfurt and Paris, valuing the Leopard 2 maker at €20bn, as Berlin seeks delay but management pushes ahead.

The Franco-German tank maker KNDS has taken a decisive step toward its long-awaited stock market debut by appointing Lazard as lead adviser for a dual listing in Frankfurt and Paris. The mandate gives concrete shape to a float that could value the Leopard 2 and Boxer manufacturer at around €20bn — a figure that would make it one of Europe’s largest defence IPOs in years.

The company’s push to go public has not been without friction. Chief executive Jean-Paul Alary confirmed on Friday that preparations are on track despite an explicit request from Berlin to delay the listing until autumn. The German government wanted more time to negotiate a direct state entry. KNDS management responded with a flat refusal, signalling confidence in the current market window for military stocks amid surging NATO defence spending.

State Stakes Carve Out Room for Private Investors

Berlin’s stake will still come in — via the state-owned KfW bank — as a 40% holding, matching France’s reduced position of the same size. At an implied valuation of €18bn to €20bn, the German slice could cost up to €8bn. Both countries aim to pare down their stakes to 30% within two to three years after the listing, opening the door for a larger free float while preserving a blocking minority under Dutch law for strategic decisions on production sites and technology.

The governance structure is deliberately modelled on that of Airbus, balancing national security interests with the discipline required by capital markets. A special agreement will give Berlin and Paris equal voting rights on key matters even as private shareholders come on board. The state’s combined 80% initial grip will gradually loosen, but neither side wants to lose control of a company that sits at the heart of Europe’s land defence modernisation.

Backlog Bulge and a Clean Balance Sheet

Financial ammunition for the IPO is plentiful. KNDS carries an order backlog of €23.5bn and generated revenue of €3.8bn last year. The company employs more than 11,000 people and is expanding capacity — including Leopard production in Norway and added volumes for the Boxer wheeled armoured vehicle. A completed separation from transmission specialist RENK has also freed up liquidity ahead of the listing.

The broader industry backdrop reinforces the story. Italy’s Leonardo closed its €1.6bn acquisition of Iveco Defence Vehicles on 18 March, signalling a wave of consolidation among European land systems builders. KNDS faces its own test: convincing investors that state proximity can coexist with equity market discipline. The Lazard mandate suggests the bankers believe the narrative is ready for prime time. Whether Berlin fully accepts that timeline remains the last big question mark.