KNDS Rolls Out Tank Production at Idled Mercedes Plant as €33bn Backlog Fuels Dual-Listing Drive
Published on 05/28/2026 at 14:23 | Redaktion boerse-global.de
Europe's largest land-defense contractor is turning to the very factories the continent's auto industry is abandoning. KNDS has entered active negotiations to take over the Mercedes-Benz plant in Ludwigsfelde, south of Berlin, and convert it into a military vehicle production hub. The move, confirmed by CEO Jean-Paul Alary, aims to relieve a capacity crunch that has become acute as orders pile up at record pace.
The Ludwigsfelde site is the more advanced of two potential acquisitions. KNDS plans to invest roughly €1bn in new production lines there, initially renting part of the facility so that civilian Mercedes transporters and military vehicles can roll off the same assembly line until the automaker completes its shift to Poland by 2030. Around 2,000 workers from Mercedes are expected to transfer to the defense group. A second target, the Volkswagen plant in Osnabrück, is less certain: production there stops in 2027, but Israeli rival Rafael Advanced Defense Systems already signed a letter of intent for the site in April.
The expansion push is driven by an order book that has ballooned to a historic €33.1bn by the end of 2025, up from €23.5bn a year earlier. New orders alone hit €13.5bn, underpinned by more than 300 Leopard 2 A8 tanks for the Czech Republic, the Netherlands and Croatia, plus surging demand for the Caesar howitzer system. Revenue rose 15.9% to €4.4bn in 2025, while operating profit jumped to €661m from €500m, lifting the EBIT margin to 15.0%. All three segments grew by double digits, led by munitions at 24.7%. Land Systems Germany alone contributed €2.5bn, up 17.4%. Headcount already stands at around 11,000, with further hiring planned this year.
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KNDS is simultaneously shoring up its balance sheet for the planned dual listing in Frankfurt and Paris, still targeted for June or July 2026. On May 19 it placed 5.8 million shares in gearbox maker RENK Group through an accelerated bookbuild, raising about €262m and cutting its stake to roughly 10%. Proceeds will strengthen the finances ahead of the IPO.
A major hurdle to the listing — the audit of the 2025 accounts by PwC — has now been cleared. The audit had been blocked by an independent investigation into a 2013 Qatar deal that involved 24 PzH 2000 howitzers, 62 Leopard 2 tanks and associated equipment. The probe has advanced enough to allow PwC to complete its work, paving the way for the securities prospectus.
Berlin is still debating how much of the company it will own. The defence ministry wants a 40% stake to match France's holding, then reduce both stakes to around 30% over two to three years. Other ministries argue that a 30% blocking minority under Dutch law would be sufficient, but the IPO window in the current fiscal year remains management's stated goal regardless of the outcome.
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