KNDS, a Franco-German entity based in Amsterdam, is currently at the heart of European rearmament. This IPO is expected to be one of the most significant of the year in Europe.
In 2015, amid the rise of the Islamic State and the conflict in Donbas, France's Nexter and Germany's KMW joined forces to form KNDS.
KNDS is exclusively positioned in land combat and supplies over twenty European armies. The group is primarily known for its tanks, as it resulted from the merger of the manufacturers of the iconic Leclerc and Leopard. However, its activities extend further, as it also produces armored vehicles, bridging systems, ammunition, artillery systems and combat management solutions.
In 2024, the group's revenue grew by 15% to €3.8bn. More importantly, its order book surged by 44%, reaching €23.5bn by the end of the year. Given the 20% increase in defense spending by European allies and Canada in 2025, there is little doubt that this figure has continued to climb.
For the IPO, the discussed valuation sits between €20bn and €25bn, which would make it the twelfth largest market capitalization in the European defense sector. Given the context surrounding the company, a limited free float is expected, with a minimum of 20%-25%.
This is, in fact, one of the major issues of the operation. Currently, the capital is split between the French State and the Bode-Wegmann family. Who will divest what? And how will the German State be integrated into the equation? These questions remain unanswered.
Berlin is targeting 25.1% of the capital, a threshold that would grant a blocking minority. For its part, the Bode-Wegmann family reportedly wishes to reduce its stake. Thanks to various sources, from Reuters to Bloomberg, as well as statements from the CEO, more is known about the deal's environment. KNDS would be dual-listed in Paris and Frankfurt; the group would seek to raise fresh capital in addition to a sale of existing shares, while specifying that the final structure has not yet been completed. Within this logic, the entry of the German State into the capital, at least up to 25%, is indeed under discussion. This would mechanically imply a reduction in French weight in the name of a certain balance.
A symbol of European cooperation challenges
On paper, this partnership has all the hallmarks of ideal European cooperation. We see a consolidation of continental expertise in a strategic sector, serving greater industrial autonomy. But in practice, the record of this first decade of Franco-German cooperation is tarnished by politics. It has been weakened by sovereignty issues and strategic divergences. It is perhaps a textbook case of the poorly exploited potential of the dream of unity that was sometimes promised with the European Union.
Indeed, there was never any question of a full merger in this matter. KNDS is a holding company based in Amsterdam, but there are indeed two separate entities. Each retains its own clients, production sites, and certain technologies deemed too sensitive to be fully shared, even with a friendly neighbor. Even in Europe, even with the stakes involved, there is no real transnational friendship, but rather competition behind a political mask.
Sovereignty concerns have therefore considerably limited the potential for cost savings and synergies that investors like to see.
The future tank project, the MGCS, was nevertheless supposed to embody this industrial union. It is a major program for European sovereignty, and all the more important for France, where production of the Leclerc has been halted for nearly twenty years. Originally, the project relied on a clear sharing of tasks and economic benefits. But in 2019, Germany imposed the expertise of Rheinmetall. This was a sensitive choice, notably because the German industrialist is a direct competitor of the French in ammunition and artillery. The question of "who does what" then became sensitive. Consequently, the program became bogged down in disagreements over work distribution. It took until 2025 to see the creation of a company held in equal parts by the two KNDS entities - Rheinmetall and Thales - the latter having been added for "equity."
At the beginning of the year, the four groups submitted their joint proposal to the two governments. And according to the KNDS CEO, the combat systems for the future tank are already in the production catalog. At the very least, it can be said that progress is faster here than for the European future combat aircraft project (SCAF) between Dassault and Airbus.
Flaws, qualities - and investors eager to test them
Despite the issues that could hinder a strong market performance in the future, this introduction maintains real strategic coherence and an interesting "equity story."
If the capital structure is evolving today, it is primarily to increase the industrial capacities of a group whose order book is overflowing. The CEO also announced that a capital increase could help strengthen European consolidation in the land combat segment.
The market timing also appears well-chosen. While certainly slightly less favorable than for Renk at the start of 2024, the successful IPO of its German client, coupled with the sector's performance in recent years, must have reassured decision-makers.
In this respect, it is always worth noting that KNDS holds 15% of Renk's capital, worth approximately €1bn. Furthermore, Christian Schulz, the former CFO of Renk and architect of its IPO conducted with a similarly limited free float, has been recruited to lead the KNDS listing.
This is the context surrounding the KNDS IPO. The stock will have its constraints, starting with the fact that profit maximization will likely never be the sole priority. However, it will also offer the profile of a group with both high revenue visibility and clarity, as it is solely focused on land defense. This positioning is easier to understand than the diversification strategies seen at Rheinmetall, for example, and above all, it offers direct exposure to one of the most buoyant segments of the European market in recent years.
