KNDS Turns to Empty Car Plants to Feed Its €33bn Order Book as Governments Position for IPO

Europe’s rearmament wave has pushed KNDS into unfamiliar territory. The Amsterdam-based defence group, known for the Leopard 2 tank and Caesar howitzer, is now scouring automotive suppliers and other industrial sectors for spare production capacity. With 13.5 billion euros of new orders flooding in during 2025 alone — pushing the total backlog to 33.1 billion euros — the company can no longer rely solely on traditional arms-making lines to keep up.

Revenue climbed to 4.4 billion euros last year, a gain of 15.9 percent, while operating profit jumped to 661 million euros from 500 million euros in 2024. The EBIT margin hit 15.0 percent of sales. Analysts value the group at between 15 billion and 20 billion euros, a range that will be tested when KNDS debuts on the Frankfurt and Paris exchanges in either June or July 2026.

Central to the listing is a delicate balancing act between two governments. Germany has agreed to buy a 40 percent stake in KNDS for an estimated 6 billion to 8 billion euros, matching the holding of France, which controls the company via GIAT Industries. Both states intend to reduce their stakes to roughly 30 percent over two to three years after the float. That timeline opens the door for free float and new institutional investors, especially as the founding Wegmann family prepares to sell its entire interest.

Should investors sell immediately? Or is it worth buying KNDS?

KNDS has already begun clearing the decks. On 19 May it sold 5.8 million shares in gearbox specialist Renk at 44.95 euros each, trimming a non-core asset. Lazard is acting as financial adviser for the IPO, which the company hopes to launch within weeks. The capital raised will help fund capacity expansion, including the talks with automotive suppliers — a move that borrows the precision manufacturing and scale of car plants to overcome defence-sector bottlenecks.

The group also showed it is looking beyond Europe for growth. At the CANSEC trade fair in Ottawa on 28 May, KNDS and General Dynamics Land Systems-Canada unveiled the "Grizzly," a 155-mm self-propelled howitzer mounted on a 10x10 chassis. The weapon system is designed for high-frequency unmanned fire and is being pitched directly at the Canadian armed forces.

Meanwhile, the broader European defence landscape is shifting. Leonardo completed its acquisition of Iveco’s defence business for 1.6 billion euros on 18 March, a deal that strengthens the Italian player in land systems. For KNDS, which already supplies more than 40 armed forces worldwide, the combination of record orders, state backing, and a fresh export product sets the stage for a listing that will test how far investor appetite for defence stocks can stretch in 2026.

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