KNDS Trims IPO Ambitions to €20bn as State Control Scares Off Investors
Published on 06/21/2026 at 08:25 | Redaktion boerse-global.de
Brussels has cleared the final regulatory hurdle for Europe’s largest defence flotation, but the company behind the Leopard tank is already dialling down expectations. The German development bank KfW and the French state entity Giat have been given the green light by the European Commission to retain joint control of KNDS after listing, removing the last formal obstacle to a dual debut in Frankfurt and Paris. Yet the celebration is muted. Investment banks steering the deal have slashed the target valuation from €25bn to a range of €18bn to €20bn, with the timetable also slipping.
The discount reflects a structural problem that no amount of booming sales can fix: the two founding governments intend to hold a combined majority stake after the IPO, leaving only 20 percent of the shares in free float. Fund managers typically shun such tightly controlled structures, wary of having no voice in boardroom decisions. Supervisory board chairman Tom Enders has publicly urged the states to commit to a long-term exit, but for now the plan is to pare down their holdings over the next three years. Originally slated for July, the listing may slip to September, though bankers remain split on timing.
Operationally, KNDS has rarely looked stronger. Revenue rose nearly 16 percent last year to €4.4bn, while operating profit hit €661m. The order backlog stands at a colossal €33.1bn, with new orders worth €13.5bn booked in the past twelve months alone, including more than 300 Leopard 2A8 tanks for European allies. Munitions, a key growth driver, expanded by roughly a quarter. The company is also racing to scale up capacity. CEO Jean-Paul Alary has opened talks with Mercedes-Benz about converting its former truck plant in Ludwigsfelde into a production line for Boxer wheeled armoured vehicles. On the technology front, a partnership with Nokia will equip the VBCI infantry fighting vehicle with a mobile 5G network, giving troops and unmanned systems secure real-time battlefield communications.
Should investors sell immediately? Or is it worth buying KNDS?
A potential game-changer is sitting on the horizon. KNDS and its US partner Leonardo DRS are bidding for a US Army artillery programme covering 500 systems, with an initial decision expected as early as July. If the award falls during the subscription period, demand for the shares could spike dramatically. Without that catalyst, the management must persuade institutional investors to accept the lower valuation based on the existing order book and expansion plans. The roadshow scheduled for the coming days will be critical.
Yet a separate headache may complicate the narrative. The Franco-German Main Ground Combat System (MGCS) programme, a next-generation tank project, faces budget concerns on the French side. Rheinmetall’s CEO has warned of potential cuts, raising the possibility of an exit. KNDS and Rheinmetall are already developing a fallback, the Leopard 3, which would be ready in the early 2030s. For now, investors will focus on the immediate prize: a dual listing that, if executed this summer, would provide fresh capital to fuel the fastest production ramp-up Europe’s defence industry has seen in decades. The official securities prospectus is expected within days, setting the final price range.
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