France Is Going to Reduce Stake in KNDS

TEHRAN (Defapress) - The KNDS group, the result of the merger of French company Nexter and German company Krauss-Maffei Wegmann, has been divided equally between the French government and the German Bode-Wegmann family since its founding in 2014. But now, with the company’s IPO approaching, the balance of power between Paris and Berlin has entered a new phase.

The German government initially planned to take only 25.1 percent of KNDS, which would be enough to have a “blocking minority.” However, the German Ministry of Defense demanded that this share be increased to 40 percent and eventually succeeded in getting its way. The defense giant is valued at around 20 billion euros.

Under the new agreement, the French and German governments will each temporarily hold 40 percent of KNDS, but this share is set to be reduced to 30 percent over the next two to three years. Despite the reduction in shares, the two countries will still have equal voting rights to maintain political and industrial balance.

Meanwhile, Tom Enders, the German chairman of the KNDS board, has stressed that this is only the beginning and that in the long term, the state share should be reduced, because, in his opinion, large defense companies do not need major state shareholders. Enders also spoke of the need to move towards “European industrial integration”, a phrase usually interpreted to mean large mergers and acquisitions in the European defense industry.

This has led to the attention of the German company Rheinmetall, a company that has previously made no secret of its interest in acquiring a majority stake in KNDS.