KNDS postpones IPO as defence shares slide; Luxembourg's armoured-vehicle order stands

Europe's largest land-defence group has blinked. KNDS, the Franco-German manufacturer of the Leopard 2 tank, the Caesar howitzer and the EBRC Jaguar armoured vehicle, said on 1 July that it is postponing what would have been one of the continent's biggest stock-market debuts of the year — even as its order book, swollen by a rearmament wave that reaches into Luxembourg, hit a record.

The Amsterdam-registered company said its shareholders had told it of their intention to resume the flotation only when markets recover. In its own words, they informed the company of their intention to resume the process "upon the return of more favorable market conditions," citing "current market volatility for the European Defense sector." The listing had been slated for a dual debut in Frankfurt and Paris around mid-July, with roughly a fifth of the company to be sold and no new shares issued.

shareholders have informed the Company of their intention to resume the Initial Public Offering process upon the return of more favorable market conditions

The pause is striking because, on paper, business has rarely been better. KNDS reported a record order backlog of €33.1 billion as of 31 December 2025, and its release insisted it had "completed substantially all required preparation phases for its proposed listing." The sticking point was price. According to reporting by Reuters and the Financial Times, KNDS was seeking a valuation above €12 billion — its German family owners reportedly holding out for at least €12.5 billion — while big funds baulked at anything much beyond €12 billion. Earlier expectations had run as high as €15 billion.

Why the defence rally cooled

For two years, investors chased anything that could roll, fly or fire, on the promise that governments would pour hundreds of billions of euros into rearmament. By mid-2026, doubts had crept in over how quickly those pledges would convert into profits. Defence shares retreated sharply from their highs: Rheinmetall, KNDS's larger listed rival, fell double digits over the month, hit in part by Germany's cancellation of the F126 frigate programme. The warning example was closer still — Czechoslovak Group, which listed in Amsterdam in January 2026, had slumped roughly 44% from its offer price.

KNDS did not close the door. The company noted it "may decide not to go ahead with the IPO at all," but its shareholders signalled they would return when conditions allow. Berlin, which has staked public money on the deal, was quick to steady nerves.

A German government spokesperson said Berlin respects the pause but remains committed to the company's future.

The federal government respects the decision to pause the IPO but remains interested in working with its French partners to lead the company into a successful future.

Who owns Europe's tank champion

The flotation is bound up with a rare reshaping of KNDS's ownership. Historically the group was split 50-50 between the French state, through its holding company GIAT Industries, and Germany's Wegmann family, sole private owner of Krauss-Maffei Wegmann. Ahead of the listing, the Wegmann family agreed to sell its entire stake and exit after 144 years. Germany is stepping in for the first time: through the state development bank KfW, Berlin is buying a 40% stake for up to €7.2 billion, a purchase the Bundestag budget committee cleared on 26 June 2026. France's GIAT trims its holding from 50% to 40%, leaving a symmetrical structure — Paris and Berlin each on 40%, with the remaining fifth earmarked for public investors.

That leaves two governments as the controlling shareholders of the company arming much of NATO's eastern flank — a reminder that, in defence, the state is often on both sides of the ledger, as buyer and as owner.

Where Luxembourg's euros go

For the Grand Duchy, the postponement changes nothing about the hardware. Luxembourg's KNDS order sits inside the group's record backlog and is unaffected by the listing delay. Under the Belgian-French CaMo (Capacité Motorisée) programme, an order for 269 additional vehicles was placed in December 2025 — including 54 destined for Luxembourg: 38 EBRC Jaguar reconnaissance vehicles, each a 25-tonne, six-wheeled machine carrying a 40mm cannon and MMP anti-tank missiles, and 16 Griffon troop carriers.

Luxembourg joins the SCORPION vehicle family through Belgium, under the NATO Defence Planning Process. The vehicles will equip the binational Luxembourg–Belgium Guide-Chasseurs Battalion, meant to be fully operational by 2030. Alongside the order, KNDS France signed a memorandum with Luxembourg's Directorate of Defence and Ministry of the Economy on 17 December 2025, promising to draw Luxembourg firms and researchers into maintenance and European projects.

The purchases fit a fast-rising budget. Luxembourg — which, unusually, measures its defence effort against gross national income rather than GDP — plans to roughly double spending from €728 million in 2024 to €1.461 billion by 2030, aiming for 2% of GNI. That trajectory runs beneath the alliance-wide pledge struck at the June 2025 Hague summit, where every NATO member bar Spain agreed to lift defence and security spending toward 5% of GDP by 2035.

What paused: KNDS's dual Frankfurt–Paris listing, sought above a €12bn valuation.

What did not: the €33.1bn order book, including Luxembourg's 54 Jaguar and Griffon vehicles.

Who profits: from 2026, KNDS is 40% French state, 40% German state, 20% public.

The message from KNDS is that the delay is about the share price, not the order pipeline. For Luxembourg, the practical question is unchanged: its rearmament euros are already committed, and much of the equipment they buy now carries a KNDS badge.