Berlin is to buy a 40 percent stake in defense giant KNDS, putting it in line with Paris, as the two countries continue to go to war militarily.
Germany and France are preparing to take over joint control of the largest tank manufacturer in the European Union, as the two countries continue their military push.
The two governments announced the deal involving Amsterdam-based KNDS on Monday, saying they had finalized a framework governing the company’s ownership, with the countries holding equal shares.
Germany is expected to buy 40% of the shares, while the French government will reduce its ownership from 50% to 40%, leaving a free float of around 20%.
The German shares would be bought from the Wegmann family, KNDS’s current German shareholder, although the deal is still awaiting final signature and the green light from the budget committee of the Bundestag.
Neither Germany nor France announced the value of the deal, but a Reuters source said the purchase of the German shares would value KNDS between €15 billion and €18 billion ($17.1 billion to $20.5 billion).
KNDS has a portfolio ranging from Leopard 2 and Leclerc tanks to armored and armored vehicles, and is a major supplier to the European military. Formed in 2015, the company has supplied the Ukrainian military with Leopards and Caesar systems and opened a Ukrainian subsidiary to support local maintenance and ammunition production.
The German government said its planned stock “it will protect the long-term influence of a company that is strategically important to Europe’s security and defense capabilities.”
French President Emmanuel Macron also praised the plan, saying that “Together with Germany, we are taking a big step for our defense freedom today.” He added that the cooperation gives the two countries “Ways to protect themselves, to produce and invent themselves,” in the pursuit of “A free Europe that defends and chooses its own destiny.”
Macron has for years emphasized Europe’s strategic independence amid a growing rift with the United States, warning the continent not to “puppet” of Washington. German Chancellor Friedrich Merz has been more cautious but is increasingly leaning towards the same approach, warning last year that European nations must end what he called protectionism. “free ride” on the United States.
Citing an example of a claim “The Russian threat,” both countries have begun accelerated military action, targeting NATO’s defense spending of 3.5% of GDP by 2035. Moscow has repeatedly dismissed rumors that it might attack NATO, with President Vladimir Putin calling the allegations as. “not only pure insanity but also deliberate provocation.”
While the new Franco-German pact marks an important step in military cooperation, the KNDS announcement came just weeks after the collapse of the joint FCAS project to build a next-generation fighter jet by 2040. The plan failed due to an estimated €3.2 billion in sunk R&D costs and intractable disputes between Dassault and Airbus over leadership of the program.
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