The German-French arms manufacturer KNDS announced on Thursday that it is postponing its planned initial public offering (IPO) due to the current "volatility of the European defense sector." The IPO was intended to facilitate the German government acquiring a 40% stake in the company.
Details of the Postponed IPO
Originally, the IPO was set to occur in early July, allowing the German government to take a significant stake in KNDS, which produces the Leopard-2 and Leclerc battle tanks. The French government would have reduced its shareholding to 40%, with the remaining 20% available for public investors. The estimated value of this transaction was around €7.2 billion ($8.25 billion), according to Der Spiegel.
However, the company stated that it would "carefully monitor the conditions on the capital markets" and intends to relaunch the IPO when market conditions improve.
Government's Reaction to the Delay
The German Defense Ministry expressed respect for KNDS's decision to postpone the IPO. A ministry spokeswoman stated, "We remain interested in leading the company towards a successful future together with our French partners," indicating continued commitment to the project.
KNDS, formed in 2015 from the merger of Krauss-Maffei Wegmann and French state-owned Nexter, is Europe’s largest tank manufacturer, employing approximately 11,000 people and reporting revenues of €4.4 billion ($5 billion) in 2025.
Market Conditions Impacting Defense Sector
The defense sector has experienced significant volatility recently. Following the full-scale Russian invasion of Ukraine, defense stocks surged but have since fluctuated. For instance, the Czech defense group CSG saw its shares lose more than half their value after a strong IPO in January.
While KNDS is cautious about the market, other companies like Quantum Systems, a German drone manufacturer, have successfully secured substantial funding. Quantum announced it raised $1.2 billion (€1.05 billion) from international investors, valuing the company at around $8 billion (€6.99 billion).
As the dynamics of the defense industry evolve, the potential for future IPOs remains uncertain, with Quantum's co-CEO indicating, "We might conduct another funding round. We might go public. Or perhaps we will simply continue to grow profitably."
🤖 This article was rewritten by Feed and Figures' editorial AI from a report originally published by DW English. Facts and quotes are preserved from the original; the rewrite focuses on clarity and structure. For the unedited original, see the source link below.
