BELFAST — France and Germany finalized an agreement today that sets the two countries up to become equal shareholders in European defense prime KNDS.
In a joint statement, Berlin and Paris said that by inking the framework pact, they have taken “a decisive step towards strengthening their common sovereignty in land defence.”
France holds a 50 percent stake which is expected to be reduced to 40 percent. Germany is seeking an identical stake, subject to approval by its budget committee, according to a separate statement today from government spokesperson Stefan Kornelius. He also said that the German government plans on reducing the scope of its stake at a future date.
Key principles of the Franco-German pact cover a “long-term shareholder commitment, parity in governance rights, and appropriate oversight of security matters.”
“The agreement also paves the way for a possible IPO [Initial Public Offering] of KNDS in the near future,” added the Franco-German statement. The potential, multi-billion dollar stock launch could go ahead as soon as tomorrow, according to Bloomberg.
The proposed future governance change represents a “significant milestone” since the manufacturer’s formation in 2015, authorities in Berlin and Paris said. Formed through a joint venture between France’s Nexter Systems and Germany’s Krauss-Maffei Wegmann (KMV), the company is well known for production of Leopard 2 and LeClerc main tank battles, as well as a broad range of infantry fighting vehicles, armored personnel carriers, uncrewed ground systems and turrets.
At its core, the ambition of the Franco-German agreement is aimed at developing KNDS into a “leading European and global defence company serving the French and German armed forces, and to strengthen its competitiveness in the European land systems industry,” said the statement.
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To honor this ambition, six objectives have been agreed to, including supporting a “paramount surge” in European defense equipment demand — especially from home nations — introducing “technical and commercial synergies” across existing and future product lines, and strengthening Europe’s supply chain.
Separately, KNDS announced today that it has completed a first delivery of 110 Stridsvagn 123 A modernized Leopard 2 main battle tanks to the Swedish procurement agency FMV.