KNDS Targets July IPO with a State-Controlled Structure and €33bn Backlog, Shunning Retail Investors
Published on 06/25/2026 at 12:13 | Redaktion boerse-global.de
The German-French defence contractor KNDS is pressing ahead with its long-awaited stock market debut, planning to list in Frankfurt and Paris in mid-July. But the timing could hardly be more challenging. As the company unveiled the final details of its initial public offering, shares of European defence peers were sliding sharply — Rheinmetall lost as much as 18% in a single session.
KNDS is selling up to 20% of its existing shares exclusively to institutional investors, leaving private individuals on the sidelines for the debut. No new equity is being issued. The expected valuation falls between €12bn and €15bn, making it one of Europe's biggest defence listings in recent years.
The banks tasked with the placement — Bank of America, Deutsche Bank, Goldman Sachs and Société Générale — will drum up institutional demand in a market that has turned sceptical. European defence stocks have retreated from their highs as investors question how quickly government rearmament pledges will translate into earnings. Rheinmetall alone has shed roughly a quarter of its value year to date.
Behind KNDS stands a backlog that would be the envy of most industrial companies: a record €33.1bn in orders. In 2025, the group generated revenue of €4.4bn, up 16% from the prior year, with an EBIT margin of 15% and free cash flow of €980m. That strong performance provides a cushion against the current sector-wide headwind.
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A deliberate growth slowdown in margins
The company expects revenue to jump around 30% this year, driven primarily by its German land systems division, whose sales are set to roughly triple versus 2025. Yet the operating margin is forecast to fall to about 12% in 2026, weighed down by start-up costs for large domestic programmes and the roll-off of unusually profitable legacy contracts.
KNDS's management plans to invest €750m in property, plant and equipment this year to support the expansion. Over the medium term, the group targets annual revenue between €11bn and €12bn, with margins returning to 14–15%. From 2027, it intends to pay dividends, with a payout ratio of around 40% of net profit, starting with the 2026 financial year.
Berlin and Paris lock in equal control
The most unusual feature of the transaction is the governance structure. After the IPO, Germany — via the state development bank KfW — and France, through the holding company GIAT Industries, will each hold roughly 40% of the shares. KfW is paying a premium to the issue price to acquire its stake.
A ten-year lock-up prevents either government from reducing its holding below 30% without the other's consent. This dual veto effectively guarantees long-term state control over a strategically vital company. Shareholders who keep their stock for at least two years will receive double voting rights, further entrenching stability.
The supervisory board will expand to twelve members after the listing. Alongside the chief executive and five independent directors, GIAT and KfW will each appoint three representatives — as long as they maintain the relevant voting thresholds.
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Approval timeline and market reception
The German parliament's budget committee must still sign off on the KfW's acquisition before the float can proceed. Assuming approval is granted, the first trading day for KNDS shares is set for July 13.
The dual listing comes amid reports that Rheinmetall had been interested in acquiring a stake in KNDS, only to be blocked by the two governments. With KNDS now entering the public markets as a direct competitor, the rivalry between Germany's two largest armour makers is set to intensify — even as both face a market that has suddenly turned cautious on defence stocks.
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