KNDS Turns to Auto Plants to Fill Tank Orders as State-Locked IPO Values Company at €15bn
28.06.2026 - 03:44:59 | boerse-global.de
European defence contractor KNDS is set to repurpose former Volkswagen and Mercedes-Benz factories into tank production lines as it grapples with a record €33.1 billion order backlog. The move comes just weeks before the company’s long-awaited dual listing in Frankfurt and Paris on July 13, a float that will hand existing shareholders up to €3 billion while leaving the company with no new capital.
CEO Jean-Paul Alary has entered negotiations to acquire sites in OsnabrĂĽck and Ludwigsfelde. At the Berlin Mercedes-Benz location, Sprinter vans and armoured Boxer vehicles would initially roll off the same assembly line before KNDS takes full control. The transition would see roughly 2,000 employees change employer. Parallel to this, the company has already launched a new Boxer production line in Munich-Allach and began output at a Norwegian facility in May that will deliver up to 36 Leopard tanks annually from the third quarter of 2026.
The production scramble reflects a luxury problem: orders now run at seven-and-a-half times annual sales, but capacity cannot keep pace. KNDS posted €4.4 billion in revenue for 2025 with a strong operating margin of 15%, but the cost of ramping up domestic defence programmes is expected to squeeze margins to around 12% in 2026. Investment this year alone stands at €750 million.
Politics stamps the IPO price
The listing’s unusual structure has already depressed valuation expectations. Banks had initially targeted a market capitalisation of €25 billion, but that has been slashed to a range of €12 billion to €15 billion. The discount reflects the heavy state grip: Germany’s KfW development bank is acquiring a 40% stake for up to €7.2 billion, while France will also hold 40% of the common shares. The remaining 20% will be placed with institutional investors, giving them minimal influence over strategy or management.
Should investors sell immediately? Or is it worth buying KNDS?
Both governments will hold veto rights and are subject to a ten-year lock-up. Should either nation’s stake fall below 30%, the other must give consent. To sweeten the deal for long-term holders, KNDS will grant double voting rights to shares held for two years – though these carry no economic advantage. The family dynasty of the Wegmanns, which controlled the company for 144 years, exits entirely through the sale.
Dividend lure and a US target
Despite the governance constraints, management is betting on a generous payout to attract investors. From the 2026 financial year, KNDS will distribute 40% of net profit as a dividend. The first such payment is promised for 2027.
A potential near-term catalyst sits across the Atlantic. In July, the US Army is expected to award a contract for up to 500 new howitzers. KNDS has teamed up with Leonardo DRS, facing stiff competition from Rheinmetall and Hanwha. Winning the deal would open the world’s largest defence market.
KNDS at a turning point? This analysis reveals what investors need to know now.
On July 13, banks including Goldman Sachs and Deutsche Bank will set the final offer price – a moment that will test whether investors buy into a company where they hold little sway but the order books are bursting.
Ad
KNDS Stock: New Analysis - 28 June
Fresh KNDS information released. What's the impact for investors? Our latest independent report examines recent figures and market trends.
