Germany is preparing a historic shift in its defense industry by buying about 40% of KNDS, one of Europe’s largest land-systems manufacturers, in a multibillion-euro deal. The Berlin government’s move would not amount to a full nationalization, but it would make Germany one of KNDS’s two biggest shareholders, alongside France. A government spokesman said the purchase would secure Germany’s “long-term influence on a company of strategic importance for our security and defense capabilities.”
KNDS was formed in 2015 from the merger of Germany’s private Krauss-Maffei Wegmann and France’s state-owned Nexter. It makes weapons and military vehicles, including Leopard 1 and Leopard 2 tanks, employs more than 11,000 people across 35 production sites, mostly in Germany and France, and reported 2025 revenue of 4.4 billion euros with an order backlog of about 33.1 billion euros. Since Russia’s invasion of Ukraine, the company’s orders have topped 30 billion euros and annual revenue has climbed to nearly 5 billion euros.
The German army alone has ordered 134 advanced tanks for the fastest possible delivery, and other European militaries have ordered more than 200 additional tanks, some for Ukraine with European funding. KNDS is also central to plans for a new joint German-French main battle tank, which helped push Berlin to renegotiate ownership. Talks began more than a year ago with the “Wagmann heirs,” a group of several dozen Germans who inherited shares from KMW’s founders.
Under the deal now accepted by Germany, the state would buy 40% while France would reduce its stake to the same level, with both sides later planning to cut their holdings to 30% to allow KNDS to raise more capital. The family would sell 10% on the open market, and France would do the same. The company is valued at 15 billion to 20 billion euros, and the heirs sought a premium over the future IPO price. The government has not disclosed the purchase price, but the agreement is expected to win budget committee approval in the coming days. An IPO is expected as soon as next month, in Frankfurt or Paris, with about 20% of shares sold to fund rapid expansion, including new tank and armored vehicle production lines worth billions of euros. Bavarian premier Markus Söder is said to have lobbied behind the scenes, as Bavaria hosts about a third of Germany’s defense companies and KNDS’s German headquarters in Munich.
