Franco-German tank manufacturer KNDS has pressured the German government to finalize plans for acquiring a stake in the company before its anticipated stock market listing this summer. Chair Tom Enders warned Berlin in a recent letter that KNDS would proceed with an IPO within two months regardless of government involvement, according to sources. The urgency stems from stalled negotiations with family shareholders, who control half the firm and seek an exit after a year of stalled talks. A pre-IPO agreement could prevent the French state—owner of the other half—from becoming the largest single shareholder of this key supplier to Germany’s military.

Internal German government divisions have delayed decisions, with the economy ministry advocating a 30% stake and the defense ministry pushing for 40% to account for future dilution. KNDS’s IPO aims for a €15bn-€20bn valuation, capitalizing on strong defense sector demand. However, disagreements over stake size and price persist with family owners, who fear missing the opportunity as Germany ramps military spending. The outcome could determine whether KNDS remains aligned with Berlin’s defense priorities or leans toward Paris, its co-owner.

Complicating matters, KNDS faces a separate bribery probe tied to a 2013 Qatar deal, delaying finalization of its 2025 financials. Auditor PwC has postponed certification until the investigation concludes. Despite this, advisers confirm the company remains focused on its IPO strategy, backed by the board. The dispute mirrors broader tensions in Franco-German defense cooperation, including a stalled €100bn fighter jet project between Airbus and Dassault Aviation.

The IPO’s structure envisions a minority stake sale, with Germany and France holding equal residual shares. However, Berlin seeks guarantees that France will reduce its stake to match Germany’s post-IPO. With ministers now directly involved, a decision is expected soon. This move underscores how defense industrialization efforts are reshaping corporate governance and geopolitical alliances.