BELFAST \u2014 France and Germany finalized an agreement today that sets the two countries up to become equal shareholders in European defense prime KNDS.<\/p>\n
In a joint statement, Berlin and Paris said that by inking the framework pact, they have taken \u201ca decisive step towards strengthening their common sovereignty in land defence.\u201d <\/p>\n
France holds a 50 percent stake which is expected to be reduced to 40 percent. Germany is seeking an identical stake, subject to approval by its budget committee, according to a separate statement today<\/a> from government spokesperson Stefan Kornelius. He also said that the German government plans on reducing the scope of its stake at a future date.<\/p>\n Key principles of the Franco-German pact cover a \u201clong-term shareholder commitment, parity in governance rights, and appropriate oversight of security matters.\u201d <\/p>\n \u201cThe agreement also paves the way for a possible IPO [Initial Public Offering] of KNDS in the near future,\u201d added the Franco-German statement. The potential, multi-billion dollar stock launch could go ahead as soon as tomorrow<\/a>, according to Bloomberg. <\/p>\n The proposed future governance change represents a \u201csignificant milestone\u201d since the manufacturer\u2019s formation in 2015, authorities in Berlin and Paris said. Formed through a joint venture between France\u2019s Nexter Systems and Germany\u2019s Krauss-Maffei Wegmann (KMV), the company is well known for production of Leopard 2 and LeClerc main tank battles, as well as a broad range of infantry fighting vehicles, armored personnel carriers, uncrewed ground systems and turrets.<\/p>\n At its core, the ambition of the Franco-German agreement is aimed at developing KNDS into a \u201cleading European and global defence company serving the French and German armed forces, and to strengthen its competitiveness in the European land systems industry,\u201d said the statement. <\/p>\n To honor this ambition, six objectives have been agreed to, including supporting a \u201cparamount surge\u201d in European defense equipment demand \u2014 especially from home nations \u2014 introducing \u201ctechnical and commercial synergies\u201d across existing and future product lines, and strengthening Europe\u2019s supply chain.<\/p>\n