Germany agrees to take 50% stake in tank maker KNDS from owning families

In brief

• Germany has reached a basic agreement with the owning families of KNDS to take a 50 percent stake in the tank maker.
• The families Braunbehrens and Bode hold their shares through the Wegmann holding, and France already owns the other half.
• Earlier plans for a stock market listing were postponed and later cancelled, while the reported value of the company is about 11.2 billion euros.

Berlin moves to equal footing with Paris at KNDS

The German government has reached a basic agreement with the owning families of the armaments group KNDS on Germany taking a 50 percent stake in the company, according to government circles cited by ARD (Bund und Eigentümerfamilien einigen sich auf Kaufpreis bei KNDS – tagesschau.de). The shareholders, who hold their interest through the Wegmann holding, are the Braunbehrens and Bode families. The other half is already held by the French state (Německo koupí polovinu výrobce tanků Leopard za 136 miliard – Novinky.cz) (Rüstungsunternehmen KNDS: Bund und KNDS-Eigentümerfamilien einigen sich offenbar auf Übernahme – ZEIT ONLINE).

The families had been trying to sell their shares for some time. A stock market listing in Frankfurt and Paris was first planned, with the German and French governments each offering about 10 percent of shares to investors, while Germany would have taken the remaining 40 percent from the Wegmann side. The listing was postponed over the summer and later cancelled for the autumn.

German officials say the aim is a stake equal to France's, so that Berlin sits on an equal footing with its partner. Details of the price have not been disclosed (KNDS: Bund einigt sich mit Eigentümerfamilien auf Einstieg beim Panzerbauer – DER SPIEGEL). Financial Times reporting puts the value of the whole company at about 11.2 billion euros, roughly 272 billion crowns, and mentions an additional payment to the family owners of up to one billion euros, about 24 billion crowns. Neither figure has been officially confirmed.

What is at stake

KNDS builds the Leopard 2 main battle tank and the Puma infantry fighting vehicle (Business-Ticker: Offenbar Einigung auf Einstieg des Bundes bei KNDS – FAZ.NET). Berlin has said it wants influence over key defence technology, and Defence Minister Boris Pistorius signalled over the summer that Germany would secure a say in the company regardless of the outcome of the sale process.

The agreement could be signed in November, according to reports, but KNDS and the families have not commented publicly.