KNDS Races to Repurpose Car Plants and Clear Audit Overhang for Summer Dual Listing
30.05.2026 - 12:21:50 | boerse-global.de
KNDS is chasing idle automotive factories with a cheque for roughly €1bn in its pocket, even as it wrestles with a stalled audit that could delay its long-awaited dual listing in Frankfurt and Paris. The push for extra production floorspace is a direct response to a record order backlog of €33.1bn — built largely on the back of surging European defence spending and new contracts for tanks and howitzers.
Chief executive Jean-Paul Alary has confirmed talks with several carmakers. The two most prominent targets are the Mercedes-Benz plant in Ludwigsfelde and Volkswagen’s site in Osnabrück. In Ludwigsfelde, KNDS envisages an initial partial lease for military-vehicle manufacturing before a full takeover, a move that could see some 2,000 workers switch employers. The Osnabrück plant, where VW plans to end passenger-car production in 2027, is more complicated: Rafael Advanced Defense Systems has already signed a letter of intent for the site.
The need for extra capacity is plain. Revenue in 2025 climbed 15.9% to €4.4bn, while operating profit jumped to €661m from the prior year’s €500m, lifting the EBIT margin to 15%. New orders totalled €13.5bn during the year, pushing the order book from €23.5bn to €33.1bn. The main driver is a flood of Leopard 2 A8 orders from the Czech Republic, the Netherlands and Croatia — together more than 300 units — alongside sharply rising demand for the Caesar self-propelled howitzer.
UK deal adds to the pile. The Organisation for Joint Armament Cooperation (OCCAR) recently awarded a contract worth nearly £1bn for 72 remote-controlled RCH 155 howitzers to ARTEC, a joint venture of KNDS and Rheinmetall, on behalf of the British Army. The Boxer drive module — chassis, engine and powertrain — will be built at KNDS UK’s facility in Stockport. First deliveries are scheduled for 2028, with a minimum operational capability targeted before the end of the decade.
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But the road to the stock exchange has an unexpected pothole. PwC, the company’s auditor, is refusing to sign off on the 2025 financial statements while an internal investigation remains open. The probe, conducted by law firm Freshfields, concerns a 2013 weapons deal worth €1.89bn that involved the delivery of 24 Panzerhaubitze 2000 and 62 Leopard 2 tanks to Qatar. KNDS commissioned the review on 29 April 2026. So far, the firm says it has found no evidence that any current or former employee engaged in criminal conduct. Without a completed audit, however, there can be no prospectus. If clearance arrives by the end of May, the IPO window stays open for June or July; a miss would push the listing into the autumn, likely on different terms.
State ownership adds another layer of complexity. Germany, through KfW, is taking a 40% stake in KNDS, matching the existing French government holding. That means only 20% of the equity will be freely traded at launch, a structure designed to protect sensitive military technology but one that leaves private and institutional investors access to just a fraction of a company valued at €18bn to €20bn. The low free float is expected to weigh on index inclusion and trading volumes. German entry cost is estimated at €6bn–€8bn, and both governments could gradually reduce their stakes to around 30% within two or three years after listing. In the meantime, a special dividend of up to €2bn for existing shareholders is being discussed.
KNDS has already trimmed its portfolio to sharpen the focus. On 22 May 2026 it sold roughly 5.8% of its stake in Renk, a key supplier of drivetrain components for the Leopard 2, via an accelerated bookbuild led by Deutsche Bank and Goldman Sachs with Lazard as financial adviser. KNDS now holds about 10% of Renk.
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The company insists that preparations for a dual listing in Frankfurt and Paris are on track and that the original timetable is being “fully maintained”. Whether that proves true now depends on PwC’s willingness to sign off — and on Berlin and Paris finalising their shareholder agreement. For a defence group with a books full of orders and a factory floor that cannot keep up, the next few weeks will be decisive.
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