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In a move aimed at bolstering European defense industry cooperation, Germany’s parliament budget committee has given its approval for the country to acquire a significant stake in French-German joint venture KNDS, a leading manufacturer of land systems. This acquisition is a significant step towards strengthening defense ties between the two European powers.
Under the terms of the deal, Germany and France will each hold a 40% stake in KNDS, with the remaining 20% to be floated on the market through an initial public offering (IPO). The restructuring marks a shift in the ownership structure of the company, which is currently split 50/50 between German family-owned Wegmann & Co. and French state-owned GIAT Industries.
As a result of the acquisition, Germany and France will become equal largest shareholders in KNDS, solidifying their role as major players in the European defense industry. KNDS is a significant player in the sector, producing a range of high-end systems, including the Leopard 2 and Leclerc tanks, as well as the CAESAR self-propelled howitzer and PzH 2000 artillery system.
The company’s portfolio also includes the Boxer armored fighting vehicle, which is in use by several NATO countries, and the Puma infantry fighting vehicle. Additionally, KNDS is involved in the development and production of ammunition for various military applications.
By acquiring a 40% stake in KNDS, Germany and France are not only strengthening their defense ties but also enhancing their joint capabilities in the development and production of cutting-edge military technology. This move is seen as a key step towards creating a more integrated and competitive European defense industry, capable of meeting the growing defense needs of European nations.
The acquisition is also expected to have a positive impact on the German and French economies, creating jobs and stimulating economic growth. The involvement of both countries in KNDS’s management and operations is also likely to provide a platform for the sharing of expertise and best practices in defense industry development.
The completion of the acquisition is expected to be finalized in the coming months, pending approval from the German parliament. Once the acquisition is finalized, Germany and France will be well-positioned to play a leading role in shaping the future of the European defense industry, and to continue their longstanding cooperation on defense and security issues.