Signal No. 87 · Co-owned, not co-designed

France and Germany agreed on Monday to hold equal stakes in KNDS, the Franco-German maker of the Leopard 2 and Leclerc main battle tanks, clearing the last political obstacle to a stock-market listing. Berlin will buy 40 percent from the Wegmann family holding, which has owned the German half since KNDS was formed eleven years ago out of Krauss-Maffei Wegmann and France's state-owned Nexter; the families exit in full. The French state, holder of the other half, pares its stake to 40 percent to match. Germany acquires the shares through KfW, the federal development bank, with the holding then managed by the economics ministry. The government says it is buying on market terms — a price one person familiar with the deal put to Reuters at EUR 6 billion to 7 billion, against a company valuation of EUR 15 billion to 18 billion.

The structure is built around parity. Paris and Berlin will exercise equal voting rights at shareholder meetings regardless of how much each holds. Germany also takes a blocking minority that bars the removal of KNDS directors, or any change to the company's structure, without its consent. It gains the right to send three board members, symbolic one-euro "golden shares" in three German subsidiaries, and security vetoes the company had at first resisted. Economics minister Katherina Reiche said Germany and France would now decide "on an equal footing" over a firm "of central importance for European defence capability." Both states say they will trim toward 30 percent within two to three years while keeping equal votes — though the defence ministry's letter to parliament records that France "intends to hold its remaining 40 percent for the foreseeable future."

The flotation — a dual listing in Frankfurt and Paris, "probably in early July," selling about 20 percent of the shares, drawn evenly from the French and family stakes — would be one of Europe's largest defence offerings in years. It first needs the Bundestag's Haushaltsausschuss (parliamentary budget committee) to approve the purchase on Wednesday, at its last sitting before the summer recess; the European Commission has already cleared the state's entry on competition grounds. Großwald set this structure out when it first surfaced in Signal No. 65 on 21 May, flagging two open questions: competition clearance, and whether combined state ownership near 80 percent would deter the institutions an initial public offering needs. Brussels has now answered the first. The pledge to fall toward 30 percent is aimed at the second. KNDS reported EUR 4.4 billion in 2025 revenue and a EUR 33.1 billion order backlog, around two-thirds of it German.

The stake fits a pattern: Berlin already holds 11 percent of Airbus and 25.1 percent of the sensor and radar maker Hensoldt, and is funnelling more than EUR 750 billion into military spending by 2030. It is taking the same equity route into the maker of the army's armour. The catch is the price. KNDS once hoped for an EUR 18 billion to 20 billion valuation; the slide in defence shares has pulled the working figure toward EUR 15 billion, with numbers as low as EUR 12 billion discussed, and it lists alongside a Czech ammunition maker, CSG, down more than half since its January debut. KNDS chairman Tom Enders has warned against the drift toward national protectionism the security vetoes embody.

Lorenzo Mariani, who became chief executive of Italy's Leonardo last month, told the Financial Times that Italy would be open to Germany joining the Global Combat Air Programme (GCAP). GCAP is the next-generation fighter Britain, Italy and Japan are building toward a 2035 in-service date. Bringing in a fourth nation "with the same rights as the other three" now "would be a little bit disruptive," he said, but "the long-term benefits are clear." He cited the three firms' prior work with Airbus's German division on the Eurofighter Typhoon. Berlin, he noted, is seeking either to lead a new programme or to join an existing one if its role is "substantial." Japan has been reluctant to admit partners for fear of delay; Britain's commitment has been questioned since defence secretary John Healey resigned this month over the resources the government was "unwilling to commit." The opening follows the collapse on 8 June of the EUR 100 billion Franco-German-Spanish Future Combat Air System (FCAS), which foundered on Airbus and Dassault's refusal to settle who leads.

Thomas Röwekamp, the CDU chair of the Bundestag's defence committee, said on Monday that parliament was unlikely to authorise a German minesweeper deployment to the Strait of Hormuz before lawmakers break for the summer on 11 July. The mission would answer Washington's request for help reopening the waterway after its three-month war with Iran. Defence minister Boris Pistorius has already ordered the minehunter Fulda and the support ship Mosel toward Djibouti in preparation, and said on Friday that Germany was "ready"; by Sunday he was calling swift parliamentary backing "open." Röwekamp set three conditions parliament would require: an effective ceasefire between Iran, Israel and the United States; a clear basis in international law backed by the states concerned, including Iran and Oman; and a guarantee for the safety of German soldiers. He dismissed Pistorius's suggestion that the UN Convention on the Law of the Sea could supply the legal basis as "insufficient." Government spokesman Stefan Kornelius urged "patience," calling any deployment "a process."

Ukraine's General Staff said on 22 June it had hit a plant in Russia's Voronezh region, fewer than 200 kilometres from the border, with air-launched cruise missiles. It called the plant a "critical component" of Russian defence production, making electronics for missiles including the Iskander. The regional governor, Alexander Gusev, said five people were killed and dozens injured, with verified video showing heavy smoke over the site. The same day Ukraine's military reported striking the Dubna satellite-communications centre in the Moscow region, run by Russia's largest state space-communications operator; Russian sources said the site was attacked but broadcasting was unaffected.

The strikes followed a larger operation overnight on 21 June, confirmed by President Volodymyr Zelensky, on both sides of the Kerch Strait. A joint effort by the security service (SBU), the Unmanned Systems Forces, military intelligence (HUR) and special-operations troops disabled four S-400 long-range air-defence radars and two Pantsir point-defence systems around the Crimean Bridge. The same operation set fires at an oil depot in occupied Kerch and at oil-transfer facilities in Krasnodar. Russian authorities reported the bridge closed for more than nine hours and public fuel sales across Crimea suspended.

President Zelensky, in addresses on 19 and 20 June, gave Belarus a week to dismantle four signal-relay stations in its Gomel and Brest regions. He said the towers boost the video link between Russian drone pilots and the UAVs they fly into western Ukraine, and warned that if Minsk did not act, "we will." He said Ukraine also knew "about every factory in Belarus that works for Russia," and that Belarusian gasoline deliveries to Russia had risen thirteen-fold in the first five months of 2026. On 22 June the Kremlin called the threat "utterly aggressive" interference in Belarus's internal affairs and said Vladimir Putin and Alexander Lukashenko would discuss it; Lukashenko has said he wants no further involvement in the war.