Germany strikes deal for 50% stake in Leopard tank maker KNDS

The German government has struck a ‌deal with the family owners of KNDS to buy a 50% stake in the Franco-German tank maker, according to a government document, as Berlin moves to strengthen its influence over critical defence technology. The purchase price ‌was not disclosed but will be based on "the equity value for KNDS determined in ‌the current valuation environment," according to a copy of the document reviewed by Reuters.

That means Germany is likely to pay less for a 50% stake than previously envisaged for a planned 40% holding in the maker of Leopard 2 tanks. Up ⁠to €7.2 ​billion ($8.1 billion) had been earmarked ⁠for the earlier deal in June. KNDS and the families declined to comment.

EQUAL FOOTING Berlin wants to be on an ⁠equal footing with France in KNDS and avoid being outvoted on key decisions, according to the finance ministry document ​prepared for parliament's budget committee.

Germany would acquire the families' shares before gradually reducing its stake alongside ⁠France until both hold 40%. That could be achieved through an initial public offering if market conditions allow. Business daily Handelsblatt first ⁠reported ​the news.

The families and France each hold 50% in KNDS after plans for an IPO earlier this year were shelved. Under those plans, both sides would have sold a 10% stake. The ⁠listing was first delayed and later put on hold as defence company valuations weakened and the ⁠families proved reluctant to sell. ⁠The decline in valuations has also made a government stake purchase more affordable.

($1 = €0.8880)