KNDS Shelves €15bn Dual Listing as Owners Dig In at €12.5bn Floor
Published on 07/03/2026 at 14:13 | Redaktion boerse-global.de
Minority investors have dealt a decisive blow to KNDS's planned dual listing in Paris and Frankfurt, forcing the Leopard 2 manufacturer to postpone its stock-market debut indefinitely. The core sticking point: a corporate structure that hands 80% of the voting power to two governments, leaving free float investors with just a €3bn slice and negligible influence over strategy. With the French state and Germany's KfW each set to hold 40% stakes, fund managers balked at paying a premium for what amounts to a passive holding in a tightly controlled defence champion.
The valuation row is equally entrenched. Owners, including the founding families and the French government, have refused to countenance a price below €12.5bn – down sharply from the €20bn they initially coveted. The management team had recently lowered its sights to around €15bn, but even that level implied a multiple of 23 times last year's operating profit of €661m. Investors argue the price tag no longer reflects the risks of geopolitical volatility or the limited influence they would wield as junior partners.
That scepticism is fuelled by a broader sell-off in European defence names. Rheinmetall's shares have tumbled more than 30% since the start of 2026. A starker warning comes from the Czechoslovak Group, which listed in Amsterdam in January: its stock has lost ground sharply since its debut, with some reports putting the decline at 57% – though a market capitalisation of €13.8bn suggests a drop closer to 44%. Either way, the euphoria that swept the sector last year has evaporated as investors question whether higher defence budgets will quickly translate into fatter margins.
Should investors sell immediately? Or is it worth buying KNDS?
None of this weakness reflects KNDS's operational performance, which remains robust. Revenue hit €4.4bn in 2025, while free cash flow reached €980m. The order book swelled to a record €33.1bn after the company collected €13.5bn of new contracts last year. That backlog alone would cover more than seven years of current revenues, providing ample visibility. Yet the market is demanding more than strong numbers; it wants a deal structure that treats minority holders as partners, not passengers.
Berlin, for its part, is sticking to its purchasing plan. The federal government intends to acquire a 40% stake in KNDS at a cost of up to €7.2bn, a move designed to safeguard national security interests. It has signalled it will wait for the markets to stabilise before pressing ahead, accepting the current delay in favour of long-term strategic alignment with Paris. Under the envisaged post-IPO setup, Germany and France would each hold 40%, leaving 20% for institutional investors – the very proportion that is now up for negotiation.
While the listing debate simmers, KNDS is pushing ahead with production expansion. In Görlitz, a former Alstom train factory has been converted into a modern defence plant where workers are already fabricating hulls for the Leopard 2. The site also produces modules for the Boxer wheeled armoured vehicle and will soon start manufacturing turret housings for the Puma infantry fighting vehicle. By the end of 2026, the company expects to employ 400 people at the facility.
Analysts see little chance of a revived IPO before the fourth quarter of this year, if not 2027. Morningstar's Michael Field reckons the window will open only once defence-sector sentiment turns decisively positive, and that will require several more quarters of convincing earnings across the industry. Until then, KNDS remains in the hands of its founding families and the French state, biding its time while factories keep rolling out armour.
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KNDS Stock: New Analysis - 3 July
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