Germany The government plans to buy a 40 percent stake in European tank manufacturer KNDS from the families that own the shares. Thus, Germany would come to the same amount it has Francuska, which the two countries previously agreed upon.
KNDS plans to go public. It is expected that the new German share could cost around six billion euros, which must be approved by the budget committee of the parliament. writes DW.
France currently has a 50 percent stake in the company, but intends to lower that to 40 percent. The remaining fifth of the shares should go on the stock exchanges in Frankfurt and Paris.
Berlin took steps after Wegman, the holding family that holds shares of KNDS, decided to sell.
Manufacturer of famous tanks
It is the largest European manufacturer of tanks, with the well-known German brand Leopard and French Leclerc. KNDS is also developing the next generation of these combat vehicles.
The company was created ten years ago by the merger of the German family firm Kraus-Mafaj Wegman and the French state-owned arms manufacturer Nexter.
Government spokesman Friedrich Mertz said that with the purchase, Germany is securing national interest and "long-term influence in a company that is strategically important for European security and defense capabilities."
In a joint statement, the two states stated their ambition to develop KNDS into a leading dedicated industry company in Europe "which will serve the French and German armed forces."
Direct takeover
However, this deal also provokes criticism as the German government continues to directly enter into the ownership of companies that make money from the production of weapons.
Marco Becht, a professor of corporate governance at Brussels' ULB university, says Berlin is targeting both profits and strategic control. "They think - why should they leave all the money to private investors? And why shouldn't the state make money from companies by becoming a shareholder?"
Declan Power, a defense analyst at the Dublin-based Institute of International and European Affairs, sees the significance of the deal in the willingness of Paris and Berlin to strengthen military capabilities.
"There is a lot of talk in Europe about this, but this deal is a visible step towards Europe taking control of its own defense production capacity," he tells DW.
"The protection of territory and people is the core of a responsible state, especially a democratic state," he adds.
In a statement, Berlin referred to Russia's total invasion of Ukraine as a key example of why the army must be strengthened.
What did Germany buy?
Berlin still has significant influence over the private sector by licensing manufacturers and approving arms exports. But now he seems to want to increase control.
KNDS is not the first deal. In October last year, the Government secured special advisory rights and nominations for the supervisory board at the submarine manufacturer ThyssenKrupp Marine Systems.
In 2021, the State Reconstruction Credit Institute bought a quarter of a stake in Hensolt, which makes military radars. He also owns 11 percent of the shares in the giant of the aviation industry, Airbus.
"When you look at these examples, it seems that the German state has more and more interest in the defense sector and wants to be more involved," says Becht.
Paris-Berlin axis
The agreement on KNDS is significant for bilateral relations with France. Especially since the joint FCAS fighter jet project failed ingloriously due to a misunderstanding recently.
For many, that was a signal that something was wrong in the relationship. And the current negotiations about KNDS dragged on for months.
The German government stated in a statement that it will work in "close dialogue and on an equal footing with French partners".
However, Professor Becht thinks that, from Berlin's perspective, this deal has elements of cooperation, but also a demonstration of new military strength for France.
"It shows a new German willingness to be more specific and make fewer concessions," he says. "Germany is increasingly willing to say 'no' instead of simply adapting to France."
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