KNDS Fortifies Its Balance Sheet While Governments Lock in an 80% Stake

KNDS enters defining phase with €23.5B order book, dual listing, state ownership at 40% each, and EuroPULS JV approval amid NATO spending surge.

The European defence manufacturer KNDS enters a defining phase with a €23.5 billion order book that guarantees production-line utilisation for years, providing the financial ballast for a dual listing in Frankfurt and Paris later this year. The company has simultaneously moved to trim its holding in transmission specialist Renk, raising approximately €262 million by placing 5.8 million shares with institutional investors. That disposal reduces KNDS’s stake in Renk to 10%, though the two will continue collaborating operationally – Renk remains the gearbox supplier for the Leopard 2 tank.

Berlin and Paris have now cemented their grip on the defence group, each taking a 40% equity stake. The German government bought out the domestic family owners of Krauss-Maffei Wegmann in a move designed to safeguard national security interests and create a counterweight to the French side. Both governments intend to pare back their holdings to 30% over the next two to three years, while preserving equal voting rights. KNDS chief executive Jean-Paul Alary explicitly welcomed the German entry, a clear signal that state involvement is seen as a stabilising factor ahead of the initial public offering.

Regulatory momentum is also building on the product side. On 30 April 2026 the German Federal Cartel Office approved EuroPULS GmbH, a 50/50 joint venture between KNDS Deutschland and Israel’s Elbit Systems Land. The Kassel-based entity will market and operate the EuroPULS rocket artillery system for European forces. Germany has already ordered five launchers to achieve initial operating capability, with delivery and qualification scheduled for 2027 under a government-to-government agreement between the Netherlands and Israel. Reports indicate the Bundeswehr will seek parliamentary approval in the second half of 2026 for a framework contract covering up to 500 MARS-3/EuroPULS systems.

The wider geopolitical backdrop is working in KNDS’s favour. NATO Secretary General Mark Rutte announced on 23 May that alliance members are preparing “hundreds of billions” in additional defence spending. The target has been raised from 2% to 5% of GDP by 2035, with several countries already accelerating that timetable. Europe is expected to take on greater responsibility without pushing the United States out of the alliance – a structural tailwind for land defence specialists. The company’s management has dismissed speculation about delays to the IPO, noting that 2024 alone brought in new orders worth more than €11 billion.

Not every major European project is running smoothly. The Future Combat Air System is encountering turbulence: Airbus Defence and Space has signalled openness to a “two-aircraft solution” for the next-generation fighter, reflecting deep disagreements among partner nations. France requires a carrier-capable, nuclear-capable jet, while Germany and Spain prioritise air superiority. The transition to the demonstrator phase is stalled over unresolved industrial work-sharing disputes with Dassault Aviation. Separately, the German cabinet passed a “Pakt für den Bevölkerungsschutz” on 20 May, earmarking €10 billion in federal investment by 2029 for new rescue equipment, warning systems and civil protection infrastructure.

Among comparable equities, Renk closed the trading week on 22 May at €49.03, a daily gain of 2.8%. The Munich-based drivetrain specialist posted first-quarter 2026 revenue of €283.6 million. Yet the stock remains down nearly 31% on a 12-month view – a stark contrast to the upbeat mood surrounding the broader defence sector and KNDS’s own trajectory.