State-owned German lender KfW is working with JPMorgan Chase & Co. on a potential stake in KNDS NV, signaling Berlin's push to secure influence in the Franco-German tankmaker ahead of its IPO. The German government is considering investing through KfW as the company's German family shareholders seek to reduce their 50% holding via an initial public offering.

Amsterdam-based KNDS, valued at around €25 billion ($29 billion), plans to list in Frankfurt and Paris this summer. The company has chosen Lazard Inc. as advisor, while the German family has tapped Macquarie Group Ltd. for their side. KNDS and its owners are also considering a cash dividend of €1 billion to €2 billion before the IPO, reflecting the company's strong balance sheet with minimal debt.

Beyond KfW, Czech rival CSG has expressed interest in acquiring a stake, potentially as a cornerstone investor, and has signaled interest in a full merger though such a deal is currently unlikely. Rheinmetall AG has previously shown similar interest, which KNDS CEO Jean-Paul Alary dismissed in February. Deliberations continue with no final decisions made.