Workers assemble a Leopard 2A7 main battle tank at the KNDS heavy weapons factory in Kassel, Germany, August 1, 2025.
Sean Gallup Getty Images News | Getty Images
Tank maker KNDS has formally announced its intention to proceed with an IPO, announcing on Wednesday that it plans to list its shares in both Paris and Frankfurt to support its ambitions to become Europe’s defense powerhouse.
KNDS is Europe’s leading manufacturer of land systems with the Leopard 2 main battle tank, as well as other armored vehicles and artillery systems.
The company is widely recognized as one of Europe’s strategically important defense companies, supplying NATO forces and armed forces around the world.
But the floatation comes as investors question whether Europe’s defense spending boom will live up to expectations. Governments have pledged hundreds of billions of euros for rearmament and military modernization, but defense stocks have fallen sharply from their highs as investors grow skeptical that the promised spending will soon translate into profit growth.
KNDS’s upcoming listing is expected to see current shareholders GIAT Industries (French state holding company) and various German families sell up to 20% of the company’s existing share capital through the holding company Wegman & Company.
Shares are sold directly to institutional investors and are not sold retail.
Germany on Monday announced plans to acquire a 40% stake in KNDS, saying it would allow it to “secure long-term influence in a company of strategic importance for Europe’s security and defense capabilities.” Germany’s budget committee is expected to formally adopt the decision this week.
France, which currently owns 50% of KNDS, will sell 10% of its stake to bring it on par with Germany, leaving about 20% of its shares as free float.
Announcing the IPO on Wednesday, KNDS CEO Jean-Paul Alaly said the military was “rapidly modernizing and rebuilding critical land defense capabilities” and Europe was “entering a new era of defense and security.”
Commenting on the already widely anticipated listing, Alarie said the IPO was a “natural next step for KNDS.” The statement did not specify the timing or price of the IPO. According to media reports, the valuation could be in the range of 15 billion to 18 billion euros, down from previously reported estimates of around 25 billion euros.
In a joint statement on Monday, the French and German governments emphasized the possibility of an IPO in the “near future”, adding that the company’s joint ownership and Franco-German framework strengthen common sovereignty in land defence.
In 2025, KNDS reported sales of €4.4 billion ($5 billion) and profit before interest and tax of €661 million. The company announced on Wednesday that it aims for annual sales of 11 billion to 12 billion euros in the medium term.
decline in defense
The announcement comes amid a sell-off in European defense stocks in recent months following years of strong economic growth, as governments look to ramp up defense spending amid wars in Ukraine and the Middle East.
Defense stocks fell further on Wednesday following media reports that Germany would scrap what would have been the largest warship construction program since World War II. KNDS German peer shares line metalThe company, which was expected to be the program’s prime contractor, fell as much as 18% on the news, while other leading European companies were also down mid-single digits by midday trading.
Michael Field, chief stock market strategist at Morningstar, said this year’s weak market sentiment was largely due to investors’ skepticism that European and G7 governments would fulfill their commitments to expand defense spending, which would constrain corporate growth.
Morningstar is bullish on the overall defense sector as backlogs continue to grow, but expects stocks to remain under pressure in the near term given the near-end of the war between the U.S. and Iran and progress in peace talks between Ukraine and Russia.
“If you look at the traditional methods of valuing companies, such as the price-to-earnings ratio, some companies look very expensive, but when you actually calculate how much the company is going to earn over the next 10 years… it’s very attractive compared to the company’s valuation,” Field told CNBC on Tuesday ahead of the IPO announcement.
“It’s a very good time to invest (in defense). I don’t know if it’s the best time for an IPO.”
