France and Germany have signed a new governance agreement for KNDS, the Franco-German defense group central to Europe’s next-generation main battle tank project, MGCS. Under the deal, the German state will take a 40% stake—bringing Berlin directly into the shareholder structure and clearing a path toward a potential stock market listing.
Until now, the French state—through Giat Industries—held 50% of KNDS alongside the German Bode-Wegmann family. With Berlin entering at 40%, both governments said they ultimately intend to reach “equal shareholding,” according to the official statement.
German Economy Minister Katherina Reiche said the move was needed to “secure key technologies, industrial value and jobs in Germany.” On the French side, Armed Forces Minister Catherine Vautrin and Economy Minister Roland Lescure called it “a decisive step for our armed forces, our industrial jobs and Europe’s strategic autonomy.”
An IPO now looks more realistic, with a valuation pegged at €15–€20 billion
The governance deal primarily unlocks the prospect of an initial public offering. KNDS is targeting a dual listing—an approach its CEO, Jean-Paul Alary, described last December as a way to create “a more agile and responsive structure to keep investing in technology, capacity and talent.”
The IPO could value KNDS at between €15 billion and €20 billion (about $16.2 billion to $21.6 billion), which would make it one of the largest defense-sector listings in Europe.
The Bode-Wegmann family, which wanted to sell its stake, had initially sought a €25 billion valuation (about $27.0 billion). JPMorgan, which has been mandated for the IPO, brought that down to a range of €18 billion to €20 billion (about $19.4 billion to $21.6 billion), notably because Rheinmetall—described as the market leader—had lost 25% of its value since January 2026.
Because the holding company is governed by Dutch law, France and Germany are expected to retain, even after the ownership is rebalanced, a blocking minority and equivalent voting rights. Specific agreements are also set to protect sensitive technologies, including the Caesar artillery gun and the Leopard tank.
After the SCAF stumble, Paris and Berlin are betting on land systems cooperation
The agreement lands amid lingering strain in Franco-German cooperation on major weapons programs. The SCAF project—focused on a future combat aircraft—has bogged down in industrial rivalries. With KNDS, Paris and Berlin are trying to show that bilateral cooperation remains workable, at least in ground combat systems.
KNDS brings together France’s Nexter and Germany’s Rheinmetall in a joint structure focused on armored vehicles, artillery and ammunition. The MGCS program—a new-generation tank intended to replace France’s Leclerc and Germany’s Leopard 2—sits at the center of that shared ambition.
Eurosatory, the major defense trade show held in Villepinte on June 15, 2026, served as a showcase: KNDS presented its CAPINT tank—short for “Capacité Intermédiaire”—as the first tangible demonstration of what the group can produce within the MGCS framework.
If the IPO goes ahead, it would mechanically dilute state stakes over time through capital increases. France could fall below 50%, and potentially to 30% in the longer run, while still retaining—at least on paper—the same governance rights under the Dutch legal framework.
