From Sprinter Vans to Howitzers: KNDS Scrambles for Capacity Ahead of Blockbuster Summer Listing

Franco-German defence group KNDS eyes converting automotive plants into tank factories, resolves ownership dispute, and pushes for summer IPO despite audit hurdle and unsolicited bid.

The order books are bursting at the seams, but KNDS can barely keep pace. The Franco-German defence group is now eyeing an unusual remedy: converting mothballed automotive plants into tank factories. Talks are underway with Mercedes-Benz over its Ludwigsfelde site south of Berlin, where roughly 2,000 staff could transfer from building Sprinter vans to assembling armoured vehicles. Initially KNDS would lease part of the facility, running military production alongside the commercial line, before taking full ownership. Separately, the group is also scouting Volkswagen’s Osnabrück plant in Lower Saxony. The total investment earmarked for new production lines stands at around €1bn.

The capacity push comes as KNDS rushes toward a dual listing in Paris and Frankfurt before the summer parliamentary recess. Analysts peg the tank-maker’s value at €18bn to €20bn, down from earlier estimates of as much as €25bn. The lower range still reflects a massive order backlog of €23.5bn, fuelled by European rearmament cycles. Core products such as the Leopard 2 main battle tank and the Boxer wheeled armoured vehicle are in high demand. Just last month the group secured a multi-billion-pound order from the UK for 72 RCH-155 howitzers.

Behind the scenes, a long-running political dispute over ownership has finally been resolved. Berlin will acquire a 40% stake in KNDS ahead of the flotation, putting the German government on an equal footing with the French state. Both sides plan to reduce their holdings to 30% over three years, while voting rights remain split exactly 50-50 regardless of share shifts. The compromise clears the way for a debut that could raise billions. Around a quarter of the equity is headed for the free float.

To strengthen its balance sheet ahead of the IPO, KNDS on 20 May sold roughly 5.8m shares in supplier Renk at €45.10 apiece, netting €262m. The high demand surpassed bankers’ initial estimates. KNDS now holds just 10% of Renk, with a 180-day lock-up preventing further sales for the time being. The cash injection gives management more flexibility to fund the factory conversions and maintain the IPO timetable.

Yet one last hurdle remains. Auditor PwC has refused to sign off on the 2025 annual accounts pending the outcome of an internal investigation into a Qatar-related transaction from 2013 worth nearly €2bn. Without a clean audit certificate, no securities prospectus can be drawn up. Management expects the review to be completed shortly, which would still allow a summer listing.

The situation is further complicated by an unsolicited offer from Czech defence group CSG, which is trying to buy out the German family shareholders who currently own half the company alongside Paris. The families favour both the IPO and the sale of part of their stake to Berlin. A CSG entry would disrupt the government’s goal of securing a blocking minority and could delay the whole process.

Despite the uncertainties, KNDS is pressing ahead with its industrial expansion regardless of who ultimately holds the shares. Converting former car plants into armoured-vehicle production lines signals a long-term bet on European defence spending that the group believes will remain strong well beyond the summer of 2026.