Germany agrees to buy 50% of tank maker KNDS from Wegmann families

Berlin moves to half ownership

The German government and the family shareholders of KNDS have agreed that Berlin will take a 50 percent stake in the Franco-German maker of the Leopard 2 and Leclerc tanks, according to people familiar with the matter and a Federal Finance Ministry letter to the Bundestag budget committee. Before the deal, the French state and the Bode and Braunbehrens families each held half of the company through the Wegmann holding. Once complete, Germany and France would hold equal shares. The finance ministry letter says that parity gives Germany influence in bodies such as the shareholders' meeting that is comparable to France's, so the federal government could not be outvoted on central questions. The parties aim to sign the purchase contract in November 2026, with completion planned for December 2026.

Germany50%

France50%

Germany

50 %

France

50 %

Data from the article text

The price and extra payments

In June the budget committee had approved about 7.2 billion euros for a 40 percent stake. The price for 50 percent is reported to be below that sum, according to a briefing to the committee seen by Reuters, but the exact amount is not stated in the document and can still change before the final signature. The finance ministry letter describes a price mechanism based on equity value in the current valuation environment, which it says leads to a significantly lower payment for 50 percent than the June approval. One person involved in the negotiations told the Financial Times that the potential agreement values KNDS at 11.2 billion euros, and that the government was discussing an extra 1 billion euro top-up for the family. According to the document, Berlin would also pay a surcharge for comprehensive control rights and a pro rata share of KNDS's 2026 annual profit, because it would receive the dividend for the full year while the company stays with the Wegmann holding almost until year-end.

Why the listing was shelved

The original plan had the families and France each float 10 percent of their holdings on the stock exchange, while the German state would take the remaining 40 percent from the families. That structure fell apart because the expected proceeds were too low for the families in a difficult market. The listing was planned in Frankfurt and Paris and would have led to one of the largest European market debuts in years, but investors balked at a target valuation above 12 billion euros. The flotation was first postponed in the summer and was reportedly cancelled in September. KNDS Germany CEO Florian Hohenwarter rejects the idea that the plans were abandoned, and said in an interview with WirtschaftsWoche that the company had only postponed the listing.

“Because of the difficult market conditions, our shareholders had only decided in the summer to postpone the project.”

Defence rationale and next steps

The economy ministry said the stake is meant to protect key defence technology in tank construction and to prevent the possible loss of key technologies. Defence minister Boris Pistorius had made clear in the summer that Germany would secure influence over KNDS regardless of how the sale developed. KNDS sits at the centre of the Franco-German MGCS programme for a future tank, which gained priority after the FCAS fighter programme was cancelled, and Rheinmetall and Thales also take part in the new tank programme. Handelsblatt describes the agreement as clearing the largest hurdle to turning KNDS into a state-owned group, but the deal is not final until contracts are signed. KNDS declined to comment, the Wegmann holding spokesperson declined to comment on the information, and the German government had not immediately responded to a request for comment. Two people told the Financial Times that a future flotation remains possible as a later step.