Germany agrees to take 40% stake in KNDS, alongside France

Germany has agreed to take a 40% stake in KNDS, the Franco-German maker of Leopard and Leclerc tanks, in a move that would make Berlin a direct shareholder in one of Europe’s most important defense companies.

The transaction is part of a broader reshaping of ownership and governance at KNDS, which has become more strategically significant as European governments race to expand military production after Russia’s war in Ukraine. Germany still needs approval from the Bundestag budget committee before the deal can proceed.

According to the reporting, the German stake would come from the family owners behind Krauss-Maffei Wegmann, which currently holds the other half of KNDS. France currently holds 50% of the company and is expected to reduce its stake to 40% as part of the planned arrangement.

That would leave Germany and France as equal major shareholders. A joint Franco-German statement said the two governments had agreed on KNDS strategy and governance, and that the structure could support a possible initial public offering later on.

Why KNDS matters

KNDS was formed in 2015 from Germany’s Krauss-Maffei Wegmann and France’s Nexter. It is headquartered in Amsterdam and produces tanks, armored vehicles and artillery systems, including the Leopard and Leclerc lines.

The company has become a focal point for Europe’s defense-industrial expansion. With armies seeking to replenish stocks and raise output, governments have been trying to secure more control over suppliers that are central to heavy armor and artillery production.

German officials have described the stake as a way to secure long-term influence over a company they see as strategically important for European security and defense capability. AP reported that KNDS had revenue of about 4.4 billion euros last year and more than 11,000 employees.

How the deal took shape

AP first reported the plan on June 22, saying Germany intended to take a 40% stake in KNDS. German-language coverage later said Berlin and Paris had agreed on the Bundes government's entry, with parliamentary approval still required. The Financial Times then reported that Germany had reached a deal to buy 40% of Europe’s biggest tank maker.

The sequence of reports suggests the ownership plan has moved from negotiation into a more formal agreement, though the final transaction still depends on political sign-off and the completion of the legal and financial mechanics.

The immediate next step is the Bundestag budget committee vote. Officials and company stakeholders are also still expected to clarify the valuation of the stake, the precise terms of the governance pact, and the timetable for any IPO.

For now, the main change is that Germany is moving from being a customer and industrial partner to a direct stakeholder in KNDS, alongside France, at a time when defense capacity has become a core political and economic priority in Europe.