Deal with owner families: Federal government allows KNDS entry to cost 6.6 billion euros

After the failed IPO of KNDS, the federal government invested directly in the German-French arms company. The “Spiegel” now names a concrete price. It also includes a surcharge for lost profits. Meanwhile, an order for the Boxer tank is stalled.

According to a report by “Spiegel”, the federal government is paying 6.6 billion euros to join the German-French arms company KNDS. Last week it became known that the federal government had agreed with the German owning families to take over their 50 percent share.

The price results from the valuation of KNDS of 11.2 billion euros in the run-up to the failed IPO and a surcharge of one billion euros, the magazine now reports, citing parliamentary circles. The surcharge is justified, among other things, by the fact that the annual profit expected for 2026 should still flow proportionately to the families. The purchase contract is scheduled to be signed in November.

In a submission to the Bundestag's budget committee it was only said that the purchase price for 50 percent was below the amount of up to 7.2 billion euros originally reserved for 40 percent in the summer. There was already talk of a package surcharge for the strategic investment and an unquantified surcharge for the families' lost dividends.

Bundeswehr stops ordering tanks

By investing in the German-French company, the federal government wants to protect key technologies in the construction of armored vehicles and prevent Germany from falling behind France as the second major shareholder. The owner families initially put the IPO on hold in September because the stock market valuations of defense companies had not recovered even after the summer.

While there was initially talk of a company value of more than 20 billion euros, investors ultimately did not even want to accept the hoped-for 12.5 billion euros. The entry price for the federal government should actually be based on the issue price for the KNDS shares. After the cancellation, the families also considered selling their stake to competitors such as the Czech CSG Group or a financial investor.

Meanwhile, according to “Spiegel”, a potential major order for KNDS is being delayed. The Bundeswehr's procurement office has temporarily stopped the order for 1,800 wheeled armored vehicles of the "Boxer" type due to disagreements about price and scope of services.