Germany to pay €6.6 billion for 50% stake in Leopard tank maker KNDS

The German government will pay €6.6 billion ($7.41 ​billion) for its stake ​in Franco-German defence group KNDS, ‌two people ​close to the matter told Reuters on Tuesday.

Berlin last week struck a deal with the family ‌owners of KNDS to buy a 50% stake in the maker of Leopard 2 tanks, a government document showed, as it seeks greater influence over critical defence ‌technology. A €6.6 billion price for a 50% stake is significantly less than ‌the government had previously envisaged for a planned 40% holding. Up to €7.2 billion had been earmarked for that earlier proposed deal in June.

Spiegel magazine first reported the purchase price. ⁠Citing parliamentary sources, ​it said the ⁠price was based on an €11.2 billion valuation for KNDS ahead of the company's shelved initial ⁠public offering, plus a €1 billion premium. The German government declined to comment on confidential details ​of ongoing negotiations, saying only that the planned investment was "an important decision ⁠at a time when the security situation in Europe is changing significantly".

The shareholder families ⁠declined ​to comment. According to a finance ministry document prepared for parliament's budget committee, Germany aims to match France's influence in KNDS and avoid being ⁠outvoted on key decisions.

Germany would initially acquire the families' stake, with Berlin and ⁠Paris planning to ⁠reduce their holdings to 40% each through a future initial public offering if market conditions permit. ($1 = 0.8908 euros)