Germany reaches deal to buy 40% of Europe’s biggest tank maker
Germany has reached a major agreement to acquire a 40% stake in KNDS, Europe’s largest tank manufacturer and producer of the Leopard 2 battle tank, in a strategic move aimed at strengthening its defence industry amid growing geopolitical tensions.
The deal follows months of negotiations between the German government and KNDS shareholders. A spokesperson for Chancellor Friedrich Merz said the acquisition is intended to “safeguard the interests” of Germany, particularly in light of the war in Ukraine and ongoing security concerns involving Russia. The agreement is also seen as a step toward a planned initial public offering (IPO) of the company.
Under the arrangement, Germany will purchase its stake from German family shareholders who previously owned 50% of the company. France, which also holds a 50% share, is expected to reduce its stake to 40% in order to match Germany’s holding. The remaining 20% of KNDS is expected to be floated on the stock market as part of the IPO process.
Officials from both Germany and France also confirmed a new governance pact designed to strengthen Franco-German cooperation in managing the defence giant. The agreement aims to align strategic decision-making while preserving operational independence for the company’s leadership.
The deal comes after years of tension and delays in joint European defence projects, including disputes over major weapons programs. Analysts say this agreement marks a renewed push for European defence sovereignty and industrial coordination between Paris and Berlin.
KNDS is now expected to file IPO documentation in the coming days, with trading potentially beginning before mid-July. While earlier expectations placed the company’s valuation between €15 billion and €20 billion, market conditions have reportedly lowered projections to around €12–15 billion, depending on investor demand.
German officials emphasized that the state investment will secure critical military technologies, industrial capacity, and jobs. The government also highlighted its broader defence expansion strategy, including plans for massive military spending through 2030, as Europe continues to respond to heightened security threats.