Berlin: Germany is seeking to acquire a 40% stake in Franco-German defense group KNDS, the German government said Monday, in a move aimed at securing long-term influence over a company it described as strategically important for Europe’s security and defense capabilities.
According to Anadolu Agency, government spokesperson Stefan Kornelius highlighted the increased importance of the security and defense industry due to the ongoing Russian threat to Europe and the war in Ukraine, emphasizing the necessity of expanding the defense industry’s capacity.
The German government stated its intention to strengthen bilateral and European arms cooperation, with particular emphasis on collaboration with France. ‘With this stake, the federal government intends to take account of the federal government’s interests in view of the importance of the company,’ the statement said.
Germany’s participation in KNDS is expected to secure long-term influence over a strategically important company for European security and defense capability. It aims to bolster national industrial value creation, technological sovereignty, security interests, and key technologies within the country.
The agreement and the full transaction are subject to approval by the Budget Committee of the German Bundestag. The government expressed plans to reduce the size of its stake at a later stage while maintaining the same governance rights in the company as France.
In a joint press release, France and Germany announced an agreement on KNDS’ strategy and governance, with both governments planning to become joint shareholders through transactions aimed at equal shareholding levels. This framework represents a decisive step toward strengthening their common sovereignty in land defense.
The agreement is founded on long-term shareholder commitment, parity in governance rights, and appropriate oversight of security matters. It also paves the way for a potential initial public offering of KNDS in the near future.
KNDS was formed in 2015 through the merger of Germany’s Krauss-Maffei Wegmann (KMW) and France’s Nexter Systems. It is among Europe’s leading manufacturers of land systems, producing Leopard 2 battle tanks, artillery systems, infantry fighting vehicles, and ammunition.
With over 11,000 employees, KNDS is one of Europe’s strategically important defense companies and a relevant supplier for Germany’s armed forces. France and Germany expressed their shared ambition to develop KNDS into a leading European and global defense company, serving both countries’ armed forces while expanding capacity, strengthening supply chains, and reinforcing European sovereignty in defense.