Rheinmetall's executive board told analysts that is aiming for a stake that could go up to 75 percent if the company merges its own activities into KNDS, the paper said, adding that alternatively a cooperation agreement between the companies was an option.

The companies were not available for comment.

Rheinmetall said last month that it was in talks about buying a stake in KNDS, adding that the transaction depended on a variety of political, economic and regulatory factors.

(Reporting by Arno Schuetze; Editing by Keith Weir)