Franco-German defence giant KNDS has pulled its initial public offering just one week after announcing plans to list on the Frankfurt and Paris stock exchanges. The official reason cited volatility in the European defence sector, but sources indicate the real issue was a disagreement over the company’s valuation, which the German government considered too high.
The company, which produces tanks such as the Leopard 2 and Leclerc, howitzers like the Caesar, armoured vehicles Puma and Boxer, and a full range of ammunition from 20mm to 155mm, had initially planned to sell up to 20 percent of new shares. The IPO was meant to facilitate the sale of a 40-percent stake held by the Wegmann family to the German government at the issue price.
Preliminary estimates valued KNDS at around 12 billion euros, but later assessments pushed the figure to between 15 and 18 billion euros. That sharp increase appears to have derailed the transaction. The German government, as a prospective buyer of the Wegmann stake, balked at the higher price tag.
Official explanation vs. real reasons
– KNDS and its shareholders are fully aligned on the priorities of action: customer satisfaction, expanding the product range, and continuing work on innovative solutions that will strengthen European defence capabilities – the company said in a statement. It added that the decision to suspend the public offering was due to volatility in the European defence sector and in anticipation of a return to more favourable market conditions.
These explanations remain at a very high level of generality and do not address the real reasons behind the IPO procedure that was supposed to result in the company’s listing – noted observers. The actual stumbling block appears to be the valuation gap between what the Wegmann family and the German government consider fair.
Strategic implications for European defence
Currently, KNDS is owned equally by the French state, through the holding company GIAT Industries, and the German Wegmann family. The planned IPO was seen as a way to bring in the German government as a direct shareholder and to raise capital for expansion amid surging demand for military equipment in Europe. The cancellation leaves the ownership structure unchanged and raises questions about future financing of the group’s ambitious programmes.
KNDS remains one of the largest European manufacturers of armoured vehicles and artillery systems. Its products are used by numerous NATO armies, and the company is a key supplier to Ukraine’s defence forces. The failed IPO may delay investments in new production lines and research projects, though the company insists its priorities remain unchanged.
Źródło: wnp.pl, Fot. Tim Rademacher / Wikimedia Commons / CC 4.0 BY-SA
