The KNDS Group is the general contractor for the production of the Leopard 2 A6 main battle tank
Which: pa/Panama Pictures/Christoph Hardt
The German armaments giant Krauss-Maffei Wegmann and the French partner Nexter will in future sell their products under the joint brand name KNDS. This is intended to encourage new mergers in the industry. A big German rival is probably left out.
60 years after the start of series production of the German Leopard battle tank it will no longer be sold under the traditional brand name Krauss-Maffei Wegmann (KMW). The two large armaments groups Krauss-Maffei Wegmann from Germany and Nexter from France, which formed a joint venture in 2015, are abolishing their national brands.
In the future, the armaments products would be sold under the KNDS brand, an abbreviation for the umbrella company KMW Nexter Defense Systems based in Amsterdam. According to its own statements, KNDS intends to use the new appearance to “underline its claim to be the driving force behind the necessary consolidation of the European industry for military land systems”.
The former boss of Krauss-Maffei Wegmann, Frank Haun, who initially formed a dual leadership at KNDS with a French manager and has been the sole boss of KNDS since 2020, has always advocated mergers in the industry. The new uniform brand name is now intended to promote this. One finding is that the industry has so far been shaped by numerous national manufacturers with a large number of products and systems.
The ambitions of the Franco-German KNDS group, which sees itself as the European market leader in national defence, are in competition Rheinmetall. The Düsseldorf armaments group and Munich-based Krauss-Maffei Wegmann are collaborating on some armaments projects such as the Leopard, the Panzerhaubitze 2000 or the Puma infantry fighting vehicle.
At the same time develops Rheinmetall more and more to the rival of KMW/Nexter, for example with the German tank developments Panther and Lynx. The French Nexter group, which developed the French battle tank Leclerc, is like Rheinmetall also a large ammunition manufacturer. There is competition in this field too.
A merger of KNDS with Rheinmetall discussed in 2018, which would suddenly have the greatest consolidation effect, has long been shelved due to differences in the leadership issue.
KNDS’ claim to act as the driving force behind consolidation in the industry is ambitious. With sales of EUR 6.4 billion, more than 21,000 employees and an order backlog of EUR 26.6 billion at the end of 2022, Rheinmetall is more than twice the size of the Franco-German alliance. In 2022, KNDS had sales of EUR 3.2 billion, around 9,000 employees and an order backlog of around EUR 11 billion.
While Rheinmetall is listed, the 50:50 joint venture KNDS has an unusual ownership structure. Behind Krauss-Maffei Wegmann are numerous private families who prefer to remain hidden. Nexter, on the other hand, is owned by the French state through an intermediate company.
When KMW boss Haun announced the merger with Nexter from France eight years ago, he already had the goal of further mergers and the standardization of European weapon systems in mind. His concept was that a land combat system was needed for as many European armies as possible. “These armies must be able to fight with standardized equipment,” Haun now tells the news magazine Spiegel.
“Everything on shares” is the daily stock exchange shot from the WELT business editorial team. Every morning from 7 a.m. with our financial journalists. For stock market experts and beginners. Subscribe to the podcast at Spotify, Apple Podcast, Amazon Music and Deezer. Or directly by RSS-Feed.