France and Germany said Monday that they had agreed on the joint governance of arms maker KNDS, paving the way for a blockbuster share offering as they seek to bolster defence cooperation.
“This agreement reflects the shared determination of France and Germany to strengthen Europe’s industrial and defence capabilities, to support their armed forces, and to reinforce European sovereignty in an enduring fashion,” according to a joint statement issued by the French presidency.
Under the deal, Berlin and Paris will aim to hold equal stakes in the maker of tanks and other military equipment.
After lengthy internal wrangling, the German government announced in May it would seek to acquire a 40 percent stake in KNDS when the group launches its expected dual share listing on the Paris and Frankfurt stock markets.
Currently, half of KNDS is held by the French state via a holding company, with the rest of the shares in the ownership of German families who are now seeking to sell their stake.
Citing the growing threat from Russia, the German government said it was urgent to bolster defence capabilities.
“The government aims in particular to strengthen bilateral and European armaments cooperation. Cooperation with France plays a key role in this regard,” it said in a statement.
The KNDS deal comes after the collapse this month of a French-German initiative to build a new fighter jet.
The tank maker is planning an initial public offering (IPO) of shares in the near future, which reports say could value the company at 15 to 20 billion euros ($17 to $23 billion).
The Amsterdam-headquartered group, created in 2015 through a merger of French and German companies, specialises in land defence systems, with a portfolio ranging from Leopard 2 and Leclerc tanks to artillery and armoured vehicles.
