KNDS Owners Mull IPO or Stake Sale Amid Defense Sector Interest

KNDS NV shareholders are exploring options to reduce their 50% stake, including an IPO or partial divestment, amid growing interest in defense companies. The German family behind Krauss-Maffei Wegmann, which merged with Nexter, is considering an IPO that could value the company at €20 billion. Private equity firms, Middle Eastern wealth funds, and German asset managers have expressed interest in acquiring a stake. The German government is in early stages of examining a 25.1% purchase.

KNDS NV, the Franco-German land defense group formed by the merger of Krauss-Maffei Wegmann and Nexter, is considering reducing its German family shareholders' 50% stake through an initial public offering (IPO) or partial divestment, according to reports [1][2]. This move comes as investor interest in defense companies surges, driven by geopolitical tensions and technological advancements.

The German family members behind Krauss-Maffei Wegmann have informed the German government about their plans to sell part of their stake. They are considering an IPO or partial divestment, with Berlin in the early stages of examining the purchase of a blocking minority of 25.1% [1][2]. Several private equity firms, Middle Eastern wealth funds, German asset managers, and family offices have shown early interest in acquiring a stake in KNDS NV. Investment firms such as Advent, CVC Capital Partners Plc, KKR & Co, and Warburg Pincus have begun preliminary discussions about a potential investment [1][2].

An IPO remains the preferred option for KNDS NV owners to partially cash out their stake. They have been discussing with potential advisers about a listing that could happen next year, potentially valuing the defense company at €20 billion ($23 billion) or more [1][2]. If they pursue a listing, the German family shareholders and the French government, which controls the other 50%, might each sell slightly more than 10% of their stakes.

At the same time, the German families, including the Bode and Braunbehrens clans, are receiving interest from financial investors as they seek to reduce their stake further. The family shareholders might also consider interest from large industry peers like Rheinmetall AG. Any new shareholders would likely need approval from the German government [1][2].

If an IPO or stake sale doesn't materialize, the German family owners might even consider breaking up the company to facilitate an eventual exit. This would undo the 2015 merger of Krauss-Maffei Wegmann and Nexter. This option is currently viewed only as a backup plan but might be favored by some German lawmakers and labor unions while giving the family more flexibility to sell their stake [1][2].

The final decision is complicated by the German-French ownership structure, with both sides able to block strategic changes, and differences among some individual family members [1][2].

References:
[1] https://www.bloomberg.com/news/articles/2025-07-16/tankmaker-knds-explores-ipo-stake-sale-as-buyout-firms-circle
[2] https://www.investing.com/news/stock-market-news/knds-owners-explore-ipo-or-stake-sale-amid-defense-sector-interest-4138259