KNDS IPO Hangs on German Budget Vote as €33bn Order Book and State-Locked Structure Readies for July Listing
Veröffentlicht: 26.06.2026 um 15:27 Uhr, Redaktion boerse-global.de
The Franco-German tank maker KNDS must clear one final parliamentary hurdle before its long-awaited initial public offering can proceed. The German Bundestag's budget committee is due to vote on Friday on the government's planned acquisition of a 40 percent stake, a decision that will determine whether the listing stays on track for mid-July.
Opposition lawmakers have complained they were given insufficient time to scrutinise the investment. Yet with a hard deadline of July 13 for the first day of trading, the committee is expected to give its green light, paving the way for a flotation that ends the Wegmann family's 144-year involvement in the business.
Wegmann exit, state entry – and a 10-year standoff
Germany will buy its 40 percent holding directly from the Wegmann family via the KfW development bank, paying a price that includes a control premium and will be adjusted for share price performance after listing. The entire cost and risk falls on the federal government. France, through its state holding company GIAT Industries, will also hold exactly 40 percent after the IPO.
The remaining 20 percent of shares will be placed with institutional investors through private placements; no public subscription is planned.
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The governance structure is designed for long-term stability – and mutual suspicion. Paris and Berlin have agreed a ten-year lock-up during which neither side can reduce its stake below 30 percent without the other's consent. Germany also retains a golden share in the domestic subsidiary, giving it a veto over strategic decisions. Chairman Tom Enders, the former Airbus boss, described Berlin's entry as a "strong signal of confidence in KNDS and its future."
Record backlog but margins set to dip
KNDS brings formidable financial momentum to the market. Revenue rose 15.9 percent in 2025 to €4.4 billion, while order intake reached €13.5 billion. The order book swelled to a record €33.1 billion – more than seven times annual sales. Earnings before interest and tax came in at €661 million, corresponding to a margin of 15.0 percent, and free cash flow hit €980 million.
The outlook for 2026 signals a growth spurt: revenue is forecast to climb roughly 30 percent. But profitability will compress as large domestic programmes ramp up and exceptionally high-margin contracts from the previous year drop out. The EBIT margin is expected to fall to around 12 percent.
Longer term, management targets annual revenue of €11 billion to €12 billion. Dividend payments are planned from 2027 based on 2026 results, with a payout ratio of roughly 40 percent of net profit.
Defence stocks under pressure, and Rheinmetall's thwarted ambition
The IPO comes at a tricky moment for European defence equities. Investors have grown sceptical that promised increases in military spending will translate into earnings quickly enough. Rheinmetall, the Düsseldorf-based rival, has shed about a quarter of its market value this year. According to reports, Rheinmetall had itself explored taking a stake in KNDS but was blocked by the two governments – underlining how politically charged the ownership structure has become.
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A potential wild card is the US Army's upcoming howitzer tender. Up to 500 self-propelled artillery units are up for grabs, with production expected to begin in 2028. KNDS, teamed with Leonardo DRS, is competing against Hanwha, Rheinmetall and Elbit America.
Valuation range and deal mechanics
Valuation estimates vary. The Financial Times has put the IPO value at €12 billion to €15 billion, while other reports cite a range of €15 billion to €18 billion. The discrepancy may be resolved by market conditions at the time of pricing.
Bank of America, Deutsche Bank, Goldman Sachs and Société Générale are acting as global coordinators. If the budget committee gives its approval on Friday, the way will be clear for a first listing on July 13 – and for one of Europe's most politically charged IPOs in years.
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