There has been discussion for weeks about another postponement of KNDS's stock market debut. CEO Alary makes it clear: the tank manufacturer's IPO should come. One hurdle: the evaluation.
KNDS boss Jean-Paul Alary: “I only have one plan.” Photo: REUTERS
Paris. Mr. Alary, KNDS wanted to go public this year, but the project has been on hold since the end of June. Have you given up on the plan?
No, not at all. The IPO is suspended for now, but not canceled. The Board of Directors made this decision at the end of June based on market conditions. The currently achievable valuation does not yet meet the expectations of shareholders. Of course, that doesn't stop us from talking to investors. The board of directors has asked us to be ready so that things can start at any time.
The owner family only wants to sell if the company reaches a valuation of 12.5 to 15 billion euros. The prices of arms stocks are under pressure, including Rheinmetall, which is what the valuation is based on. What could change the market environment?
We have never confirmed this number. Rheinmetall is an obvious comparison, but not the only one. Markets can change quickly. We have experienced significant fluctuations. The positions and expectations of shareholders can also shift.
KNDS production in Munich: The company is looking for two new partners to expand production. Photo: IMAGO/Sven Simon
Under these conditions, is an attempt this year still realistic?
Yes, an IPO in 2026 is still possible – provided market conditions meet shareholders’ expectations. An early start would be best for KNDS: Then we could close the issue and use our IPO as leverage for the next development phase. Later than 2026 is also conceivable.
If the IPO is delayed until 2027: Doesn't the presidential election campaign in France make an IPO impossible? After all, the French state currently holds 50 percent of KNDS.
An election period brings uncertainty. The middle of an election campaign would not be an ideal time for an IPO. But we're not there yet.
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After long negotiations, it was agreed that 20 percent of the company would go public - and 40 percent would be held by the French and German states. Should anything change about that?
No, this is still the reference model. The federal government's entry would be closely linked to the placement on the capital market. A free float of 20 percent would also be a significant change. This does not mean that today's governance is inefficient, but rather that it is an additional lever. What is now changing is that private investors can subscribe in addition to institutional investors.
But that doesn't change much about the valuation problem.
No. The private investor tranche would not solve the valuation question and would not be a “game changer”. It is intended to enable investors who have expressed interest to participate.
Why do you even need the capital market if, according to you, KNDS has enough money?
It's not primarily about financing our investments - we have the necessary funds. An IPO can help us make decisions more quickly and implement our strategy more efficiently in a rapidly changing industry. Institutional investors regularly challenge companies. From my experience, this strengthens speed, financial discipline and clear processes. A suitable capital structure would also be helpful if consolidation opportunities arise in Europe.
Vita Jean-Paul Alary
Jean-Paul Alary has headed the German-French arms company KNDS since April 2025. The trained engineer began his career in 1991 at the aviation supplier Snecma, which later became Safran's aircraft engine division. There he held several management positions over 33 years, most recently as head of Safran Aircraft Engines. At KNDS he followed Frank Haun.
KNDS was created in 2015 through the merger of the German tank manufacturer Krauss-Maffei Wegmann and the French state-owned company Nexter. The best-known products are the Leopard 2 and Leclerc main battle tanks, the Puma infantry fighting vehicle and the Boxer armored personnel carrier. The group employs almost 11,000 people and wants to significantly expand production given an order book of around 33 billion euros. Half the owners are the German families Bode and Braunbehrens, the other half is owned by the French state.
KNDS originally wanted to go public in the summer of 2026. This was preceded by an agreement on state involvement: the federal government should take over around 40 percent. In return, France should reduce its share from 50 to 40 percent. On June 24th, KNDS officially announced its initial public offering (IPO). Shortly afterwards, however, the mood on the markets changed: after significant price losses in defense stocks and criticism from investors about the valuation, KNDS postponed the IPO. The federal government then continued to push for a timely IPO. A new attempt was supposed to start in the fall, but there has been speculation for weeks about a further postponement. Without KNDS going public, the federal government's entry would also be in jeopardy.
Do you rule out an alternative scenario, such as opening up capital to private equity funds?
I won't speculate about alternatives. My message is clear: I have only one plan, which has been developed in detail and which makes sense to support the company's ambitions in the current competitive environment, and that is to go public. There is currently no discussion about “alternatives”. If another model emerges, I would judge it based on what fits KNDS and the strategy best.
Leopard 2 main battle tank on the factory premises in Munich: “In Germany we have to ramp up production in the next two to three years.” Photo: Sven Hoppe/dpa
Why did you reject the Czech company Czechoslovak Group (CSG), which made you an offer? Isn't this an opportunity to form a European group and increase your production capacities?
This is a question you need to ask shareholders. Personally, I didn’t receive an offer. CSG is an excellent partner with whom we maintain very positive industrial collaborations in various areas.
The IPO was prepared for months and then abruptly stopped. Has this slowed down your operational business?
Preparation took time from the teams, but had no impact on commercial and operational business. In the first half of 2026, sales increased by 37 percent compared to the same period last year, and order intake increased by 38 percent. We expect sales growth of around 30 percent for the year as a whole.
How do you plan to meet the increased demand?
For 2026 and 2027, we plan to invest around 1.5 billion euros to expand industrial capacities. All three areas, i.e. systems in France, systems in Germany and ammunition, are growing. In Germany in particular, we need to ramp up production in the next two to three years. In France we want to build a second system for filling 155-millimeter artillery shells. This means that five times as many floors can be filled in the future as in 2022.
You have already taken over a former Alstom plant in Görlitz.
Around 40 to 50 percent of the planned industrial areas have already been developed for production, a year and a half after the takeover. We are training employees from the railway sector, such as welders, for military production.
Boxer wheeled tank: KNDS had hoped for well over 3,000 orders from the Bundeswehr. Photo: KNDS
They are not just expanding production at their own locations. With Dräxlmaier you have already gained a partner for Boxer components. What's next?
We need additional capacity and rely on our own locations, suppliers and industrial partners. In Germany we need two potential partners. At least one could have an announcement before the end of the year.
The takeover of the Mercedes plant in Ludwigsfelde is stalling. Are you still interested at all?
I don't want to say anything about individual locations and partners. We are talking to potential industrial partners to build the production capacity we need in 2028 and 2029.
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The large-scale procurement of Boxer wheeled tanks, which you produce together with Rheinmetall, was originally expected for the beginning of 2026. There is no binding order yet. What impact does this have on you?
The package is large and complex. We have submitted an offer together with our partner and are talking to the government. Boxer orders have already been placed for Germany, for example for the Jackal.
Does the lack of clarity about quantities, dates and variants make your capacity planning difficult?
More clarity from the federal government would help: The Boxer family includes more than twelve variants, and an ambulance is different than an artillery system. This would allow us to coordinate the production ramp-up more precisely. However, our capacity expansion follows its schedule and does not depend solely on this order.
The Bundeswehr's Jackal wheeled infantry fighting vehicle: major order is delayed. Photo: IMAGO/Björn Trotsky
The Bundeswehr is examining whether unmanned systems can replace some of the vehicles. Does this make battle tanks superfluous?
No. A battle tank fulfills three central tasks: it protects soldiers, offers great firepower and ensures mobility. Drones make the battlefield more transparent and change how military forces deploy and modernize tanks; However, they do not relieve these systems of their tasks. The front in Ukraine is currently very static. Offensive operations and breakthroughs require capabilities that drones alone cannot provide.
That means?
A tank never fights alone. Reconnaissance drones can give him a more comprehensive picture of the battlefield and autonomous robots can provide additional reconnaissance or firepower. KNDS is also working on deploying interceptor drones from its vehicles. It is crucial to network these systems so that they are more effective together.
In the German-French main battle tank project MGCS, joint vehicle development by the two governments has been significantly reduced. What remains of the program?
I won't tell you that MGCS is doing well, but the project still exists. In mid-July, the heads of state of France and Germany reduced ambitions to its higher level, networked combat. This is already a reality today. On the battlefield, we see how different networked systems operate together.
Why are you sticking with major European arms programs despite the difficulties?
Europe's defense spending is increasing but is highly fragmented. This means that the expenditure is not necessarily used efficiently. Common programs can reduce fragmentation - in the interests of taxpayers and credible European defense.
More: Difficult market environment: According to insiders, KNDS is considering postponing its IPO
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