Europe
Germany and France clash over KNDS IPO as Berlin delays stake decision
German-French tank manufacturer KNDS’s planned initial public offering has triggered a new dispute between Berlin and Paris.
KNDS, formed more than a decade ago through the merger of German arms manufacturer Krauss-Maffei Wegmann (KMW) and French company Nexter, is due to go public no later than July.
According to German Foreign Policy, Paris is pressing for the IPO to proceed because it wants to avoid any disruption linked to the presidential election campaign expected to begin in the autumn.
The German government, however, remains divided over whether it should seek a 40% stake in KNDS, matching the French state’s planned holding, or settle for 30%.
Berlin’s failure to act threatens to derail the entire flotation, prompting KNDS to consider moving forward without German state participation.
Under that scenario, defense companies from other countries could acquire shares. France is reportedly considering the participation of Italy’s Leonardo group, while Prague-based ammunition manufacturer Czechoslovak Group (CSG) has also expressed interest in joining the project.
At the same time, corruption allegations threaten to seriously disrupt the IPO process.
A brief history of German-French tank manufacturer KNDS
KNDS was established in 2015 through the merger of Germany’s tank manufacturer Krauss-Maffei Wegmann and France’s Nexter.
KMW is known for products including the Leopard 2 main battle tank and the Boxer armored vehicle, while Nexter manufactures the Leclerc main battle tank and the Caesar howitzer.
Like the Franco-German Airbus Group, the joint venture is officially headquartered in the Netherlands.
Until now, the French government on one side and Wegmann Holding on the other have each held 50% stakes.
Within Wegmann Holding, the Bode and Braunbehrens families, which maintain tight control over KMW, have combined their interests.
A KNDS stock market listing has been under discussion for a considerable period, with Wegmann Holding prepared to sell all of its shares.
In that context, the German government in particular has attached great importance to ensuring that Germany and France retain as equal an influence as possible even after the IPO.
So far, KMW and Nexter have continued producing their traditional products at their respective national facilities, with KMW accounting for the larger share at 70%.
Berlin fears losing control over that balance. It is argued that France could otherwise gain excessive access to the Leopard 2 and its underlying technology.
Uncertainty over Germany’s future stake
Regarding the IPO, Paris plans to sell 10% of its shares in KNDS while retaining 40% under state ownership.
Berlin, by contrast, has yet to decide on its own stake, despite the flotation originally being scheduled for next month and despite the German owners, the French government and KNDS insisting on maintaining that timeline.
According to reports, Defense Minister Boris Pistorius supports a 40% stake in order to preserve full parity with France.
Economy Minister Katherina Reiche and the Chancellery, however, favor a 30% stake to reduce costs, arguing that under Dutch law such a holding would be sufficient to secure the desired control rights.
Thomas Enders, the new chairman of KNDS’s supervisory board, is advocating for a stake of just 25.1%. The former Airbus CEO has noted that the German and French governments each hold less than 11% in Airbus.
As a result, if Paris could be persuaded to reduce its KNDS stake, additional private capital could be mobilized. During his tenure at Airbus, Enders succeeded in aligning the governments’ shareholdings.
France’s patience is wearing thin
The German government’s inability to reach an agreement on its KNDS stake now threatens to throw the entire IPO timetable off course.
According to an internal document recently cited by Handelsblatt, reaching an internal agreement by the summer is considered an “extremely ambitious” goal.
However, postponing the IPO until autumn is being rejected by both the French government and the German shareholder families.
On the one hand, they fear that KNDS’s market valuation — currently estimated at €20 billion — could decline over the course of the year, as happened with Rheinmetall, thereby reducing the value of the shares being sold. On the other hand, Paris wants to conclude the deal before the presidential election campaign scheduled to begin after the summer break.
Chairman Enders had already increased pressure in April. KNDS says the German government has been aware of the company’s IPO plans since the beginning of 2025 and has therefore had sufficient time to make a decision.
On Friday, KNDS CEO Jean-Paul Alary intensified that pressure further in a statement saying the company remained committed to its original timetable “in light of media speculation regarding a possible postponement of the IPO.”
The situation threatens to leave the German government sidelined.
Czechs and Italians also show interest
Reports that other defense companies are interested in acquiring KNDS shares have further complicated the situation.
France is reportedly considering encouraging Italian defense company Leonardo to invest. That could result in a French-Italian majority within KNDS.
Meanwhile, the Financial Times reported that Prague-based Czechoslovak Group, which is little known in Western Europe, is also considering purchasing shares. CSG manufactures ammunition and increased its revenue by 193% from 2023 to 2024 to $3.63 billion, largely due to large-scale deliveries to Ukraine.
The company particularly benefited from the Czech ammunition initiative under which President Petr Pavel raised billions of dollars in donations to finance ammunition purchases later exported to Kyiv by companies including CSG.
In SIPRI’s 2024 ranking of the world’s largest arms companies, CSG placed 46th, directly behind KNDS in 42nd place.
The company has continued expanding through acquisitions, including US ammunition producer The Kinetic Group, and is now reportedly in talks with Wegmann Holding over a potential share purchase.
Corruption allegations
The planned IPO is unfolding under the shadow of corruption allegations tied to the 2013 sale of 62 Leopard 2 main battle tanks and 24 Panzerhaubitze 2000 self-propelled howitzers to Qatar.
The purchase price was estimated at around €1.89 billion. According to reports, KMW — long before its merger into KNDS — appointed the Qatari company Kingdom Projects as an intermediary and paid it €85 million to secure the contract.
At the time, 75% of Kingdom Projects was owned by Sheikh Ahmed bin Nasser Al Thani, deputy chief of staff of Qatar’s military intelligence service and a member of the ruling family in Doha, while the remaining 25% belonged to his son.
KNDS says it has launched an investigation into the matter in order to clarify the allegations. According to reports, auditing firm PwC considers the accusations serious enough to delay issuing its audit opinion on KNDS’s 2025 annual financial statements.
As a result, it remains uncertain whether the IPO can proceed as planned under these conditions.
Jordan Bardella, president of France’s National Rally (RN), has been accused of voicing antisemitic views in private conversations with party members when he was 17 years old.
In a report published on Monday, investigative news website Mediapart stated that it had obtained and independently verified correspondence in which Bardella allegedly said that “Jews must dominate other peoples, crush them, and rob them,” and that “all banks are in the hands of Jews.”
Bardella strongly denied the allegations, adding that he will sue Mediapart.
Both Bardella and Marine Le Pen characterised the report as part of a wider, coordinated effort to prevent the veteran far-right politician, who currently leads in the polls, from winning next year’s election.
Bardella said:
“At a time when we have never been closer to the victory of our ideas, certain activist media outlets are ready to organise smear campaigns to destabilise the presidential campaign and attack my honour.”
The RN president said, “We can feel the first signs of an all-out war and attempts to destabilise the presidential campaign.”
Le Pen, seated beside Bardella as she spoke to reporters in the National Assembly, the lower house of the French parliament, said, “The system will do everything, even the most disgusting things, to block this momentum.”
During her attendance at a construction industry event on Monday, Le Pen described Mediapart’s report as “madness”.
The National Rally’s predecessor, the National Front, was founded by Le Pen’s father, Jean-Marie, who was convicted repeatedly of hate speech, along with Nazi collaborators.
Le Pen expelled her father from the party in 2015 after he repeated his claim that the Holocaust was a “detail” of history.
Given that Le Pen propelled Bardella’s career and placed him at the forefront of efforts to clean up the party’s image, the fallout from this latest scandal could be particularly damaging.
Too young to be associated with the party’s old guard, Bardella was seen as a fresh face who could help the party make inroads among sections of the electorate where the Le Pen name carried too many negative connotations, particularly among older voters and the Jewish community.
Since taking the helm of the National Rally in 2021, Bardella has promoted the party as a defender of France’s Jewish population, pointing to his unreserved support for Israel as evidence.
The 31-year-old Bardella travelled to Israel in 2025 after receiving an invitation from Israeli Minister of Diaspora Affairs Amichai Chikli.
The European Union paid an additional bill of more than €100 billion during the year due to volatility in global energy markets. Despite this heavy expenditure, no increase was achieved in the volume of oil and gas supplied to the bloc.
Assessing the situation ahead of the EU Energy Ministers Meeting held in Dublin, EU Commissioner for Energy Dan Jørgensen emphasised that external dependency has reached an unsustainable point.
In his statement on 29 September, Jørgensen said: “The extra amount we paid for energy this year exceeded 100 billion euros, yet in return we did not receive a single drop more oil or a single cubic metre more gas.”
Pointing out that every rise in global prices is directly reflected on European households and industry, Jørgensen argued that the solution lies in domestic resources.
“Instead of imported, polluting, and expensive fossil fuels, we must turn to our own generated energy, to green electricity,” the commissioner said.
Energy prices in Europe surged once again due to the war with Iran, escalating concerns over navigation security in the Strait of Hormuz, and turmoil across global oil markets.
Following a new wave of attacks directed at Iran by the Washington administration, European benchmark natural gas prices in early September reached their highest level since January 2023.
Dutch gas futures rose by 5.9% to €73.95 per megawatt-hour.
This market pricing was driven by concerns ahead of the winter period that liquefied natural gas (LNG) shipments routed through the Strait of Hormuz could face prolonged disruptions.
Another development rattling the continent’s energy balances was the signals emanating from the White House. The possibility raised by US President Donald Trump of curbing diesel exports heightened anxiety in Brussels.
The EU, which meets approximately half of its diesel needs from the US, does not want this supply line severed.
Jørgensen reported that he conveyed clearly to Washington that such a step would serve the interests of neither the US nor Europe.
The EU official described US Energy Secretary Chris Wright’s distance from the export restrictions in question as a positive approach.
Stating that Europe is not currently experiencing a physical supply crisis, Jørgensen noted that they aim to minimise uncertainties as the winter season approaches.
Having turned to alternative suppliers and LNG markets to reduce its reliance on Russian resources since the outbreak of the Russia-Ukraine war, the EU continues to face high cost pressures.
German Chancellor Friedrich Merz and the leaders of five other countries have threatened to withhold approval for the draft seven-year EU budget unless billions of euros in cuts are made as they demand.
According to the Financial Times, Merz, along with the leaders of the Netherlands, Sweden, Denmark, Austria, and Finland, signed a letter making clear that the proposed budget must be cut by billions of euros, or they will block it.
The 2028-2034 budget was prepared last year by the European Commission and requires the approval of all EU countries.
The proposed budget has been set at approximately 2 trillion euros ($2.33 trillion), and the parties involved hope to reach an agreement by the end of 2026.
The proposed sum is significantly higher than the current budget, which runs from 2021 to 2027.
Merz stated earlier this month that cuts should be implemented across all policy areas, rejecting further recourse to joint EU borrowing to plug the shortfall.
“Excessive debt threatens our sovereignty and our capacity to act,” the chancellor said, adding that governments face the “undoubtedly painful task” of setting priorities.
Arguing that a “20th-century budget” cannot resolve current challenges, the German leader called for spending in the bloc’s next budget to be shifted towards competitiveness and defence.
The EU budget is financed primarily through member state contributions. These payments are calculated either as national contributions based on gross national product or as a % linked to national VAT revenues.
As the EU’s largest economy, Germany provides the largest contribution in absolute terms.
Jordan Bardella faces antisemitism accusations over past messages
EU pays extra €100bn for energy without securing more oil or gas
Pentagon breach exposes personal records of three million people
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