Il CEO di Rheinmetall corteggia Berlino nel spingere per la fusione europea dei carri armati

> Rheinmetall AG Chief Executive Officer Armin Papperger is making a fresh pitch to buy part of rival KNDS NV and create a European land defense champion that would consolidate the continent’s fragmented market, according to people with knowledge of the matter.

> Papperger has spoken to politicians in Berlin and representatives of state-owned development bank KfW in recent months about investment options to more closely tie up the two tankmakers, the people said, asking not to be identified because the discussions are private.

> Possibilities include buying a significant stake in KNDS from the German family that controls 50%, with the other half owned by the French state, the people said. Rheinmetall has also voiced interest in acquiring the company’s German operations, which merged with France’s Nexter to create KNDS about a decade ago but have struggled to integrate, some of the people said. The German unit, formerly known as Krauss-Maffei Wegmann, currently accounts for the majority of KNDS’s business, the people said.

> In an interview on Dec. 5, Papperger said that Rheinmetall doesn’t talk about potential acquisitions unless they’re one or two weeks from being signed, and that European consolidation is largely a political decision.

> “The point is that both parties must have the same idea in that area. You always need two to tango,” Papperger said. “We are at the moment in a situation where we can say nothing about that thing, because I believe that at the end of the day will be also a political decision between the German and French governments.”

> French President Emmanuel Macron and German Chancellor Friedrich Merz “are very good politicians, they will find a way,” Papperger said when asked about a scenario where European land defense efforts could be based in Germany and air in France.

> Any Rheinmetall investment in KNDS would likely face opposition from the other company and the French government, which has a say in any corporate or ownership decisions, the people said. KNDS Chief Executive Officer Jean-Paul Alary said in September that Rheinmetall does not provide “the strategic element at all that is needed” when asked about a potential investment.

> A Rheinmetall stake could also derail an IPO that KNDS is potentially planning for next year, according to the people. A listing of KNDS would dent Rheinmetall’s position as one of Europe’s most prominent defense stocks.

> A spokesperson for KNDS declined to comment. A representative for the German defense ministry said the government is closely monitoring KNDS’s efforts, adding its priority is to ensure German security interests are protected in any industry developments. Spokespeople for KfW and the French government didn’t immediately respond to queries.

> Europe’s defense industry remains fragmented compared to the US, with dozens of competing land, sea and air programs, limiting production at scale and coordinated procurement. KNDS and Rheinmetall already jointly build several of their main land systems, including the Boxer armored vehicle, Puma infantry fighting vehicle and the Leopard main battle tank. If the companies were more closely linked, it could save money, and boost efficiency and investments, some of the people said.

> Rheinmetall’s behind-the-scenes push comes at a pivotal time for KNDS and Europe’s defense industry. The Franco-German tankmaker in October named former Airbus SE Chief Executive Officer Tom Enders as chairman ahead of a potential initial public offering amid a surge in European defense spending.

> The German defense giant, meanwhile, is flush with cash, with its shares soaring 158% this year and sales having increased by over €1 billion in recent nine-month earnings as compared to just a year earlier. The company has traditionally focused on land systems and ammunition, but agreed in September to buy Naval Vessels Luerssen. In 2024 Rheinmetall added military vehicle specialist Loc Performance Products to bolster its presence in the US, and acquired Spanish ammunition maker Expal Systems SA in 2022.

> The German family shareholders want to decrease their KNDS stake though a listing or a stake sale, which has attracted interest from private equity buyers, Bloomberg previously reported. Rheinmetall has spoken with members of the families, some of the people said.

> German Defense Minister Boris Pistorius said in July that the country may buy a minority stake in KNDS. That could include a blocking minority to secure Berlin’s influence, people familiar with the matter have said. Other options include a direct investment via an IPO or obtaining a golden share, some of the people said.

> Papperger has also pitched to KfW, which the German government uses to buy stakes in strategic companies, the idea of Rheinmetall buying the family stake in KNDS and Berlin holding a stake in Rheinmetall, some of the people said.

> For the time being, KNDS is moving ahead with preparations for an IPO, which could see a dual listing in Paris and Frankfurt, or in Amsterdam, where the company is based. The firm, which hired Lazard Inc. in October to advise on the listing, may seek a valuation of about €20 billion ($23.3 billion), people with knowledge of the matter have said. Global coordinators are slated to be invited this month to pitch for roles on the IPO, according to the people.

Why not make one tank each country? Then we get soo many designs edit obviously /s

It’s weird that KNDS still has no functioning joint cooperation between the french and the german part. Maybe that will change if France orders the EMBT or something in the same spirit.