KNDS IPO: A Franco-German Veto Lock-Up and a €33bn Order Book Head for a July Debut
Published on 06/25/2026 at 14:28 | Redaktion boerse-global.de
A state-crafted governance structure unlike any in European defense will accompany the stock market listing of tank-maker KNDS next month. Paris and Berlin have agreed to a mutual veto right: neither side can let its stake fall below 30% for a full decade without the other's consent. The arrangement, locked in for ten years, ensures that strategic control of the group remains firmly in government hands even as the company opens its capital to institutional investors.
KNDS enters the public arena with a record order backlog of €33.1 billion — more than seven times last year’s revenue of €4.4 billion. That revenue figure represented 16% growth over 2024, with earnings before interest and taxes of €661 million and a corresponding margin of 15%. Free cash flow reached €980 million. For 2026, management is targeting a roughly 30% jump in turnover, though the EBIT margin is expected to compress to around 12% as the group scales up large national programs and allows highly profitable legacy contracts to expire.
The margin squeeze is a calculated trade-off. KNDS is investing €750 million this year alone in new facilities to support its growth ambitions. Medium-term goals call for revenue of €11 billion to €12 billion and a margin recovery to 14%–15%. The strongest growth engine is expected to be KNDS Land Systems Germany, whose sales are projected to roughly triple versus 2025 levels. From 2027 onward, the company plans to pay dividends, with a payout ratio of about 40% of net profit, starting with the 2026 financial year.
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The shareholding structure after the IPO is unusually constrained. GIAT Industries, the French state holding company, and Germany’s KfW development bank will each hold 40%. The remaining 20% will be placed exclusively with institutional investors through a dual listing in Frankfurt and Paris. No new shares are being issued, and retail investors will not receive an allocation. A two-year holding period qualifies for double voting rights, further entrenching long-term owners.
The supervisory board will expand to 12 members after the float. Alongside the CEO and five independent directors, GIAT and KfW will each nominate three representatives as long as they maintain the relevant voting thresholds. The valuation of the company is reported to be in the range of €12 billion to €15 billion, which would make this one of Europe’s largest defense IPOs in recent years.
Timing is tight and the market backdrop unforgiving. The first listing is scheduled for mid-July, with a hard deadline of July 13. European defense stocks have retreated sharply from their highs as investors question whether promised government spending increases will materialize quickly enough to sustain earnings growth. Rheinmetall, a direct peer, has already lost about a quarter of its market value this year. Reports indicate that Rheinmetall had sought a stake in KNDS but was rebuffed by the participating governments.
The underwriting syndicate — Bank of America, Deutsche Bank, Goldman Sachs and Société Générale — provides ample firepower. Whether the market will embrace a company whose free float is capped at 20% and whose two controlling shareholders can block any unwanted move for a decade will become clear once the order books close next month.
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