As of: February 7, 2024, 3:22 p.m
By: Lars-Eric Nievelstein
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The tank gear manufacturer Renk wants to go public on Wednesday.
The defense company KNDS has already secured part of the shares.
Augsburg – Preventing a takeover by potentially hostile actors is one of several positive side effects of the Renk IPO.
The arms industry in some countries - especially in Europe - is currently repositioning itself, among other things to respond to the threat from states such as Russia and China.
The Augsburg tank transmission specialist Renk and the defense company KNDS are two of many defense companies that are currently getting closer.
Purchase price per Renk share |
150 euros |
|---|---|
Takeover sum of ESG by HENSOLDT |
675 million euros |
Purchase price of Renk shares by KNDS |
100 million euros |
KNDS buys Renk shares – 100 million euros with the prospect of more
Background: Renk had already planned to go public last October, but called it off at the last moment.
The reasons for this, the
Süddeutsche Zeitung
reported , were the difficult market environment, the price expectations and the US stock exchanges.
Now, at the beginning of the week, the surprise came.
Renk now wants to go public, and as quickly as possible.
This time the whole thing will be financed privately.
The tank gear manufacturer Renk wants to go public on Wednesday.
The defense company KNDS has already secured part of the shares.
Within the European defense industry, players are insisting on more cooperation.
© IMAGO / Scanpix
The arms holding company “KMW+Nexter Defense Systems NV”, or KNDS for short, took advantage of this and secured Renk shares worth around 100 million euros.
KNDS has the option of increasing its shareholding to up to 25 percent at a later date.
In addition, the US asset manager Wellington Management has invested 50 million euros.
Private investors can take action from Wednesday;
the fixed price per share is 15 euros.
KDNS wants Renk's independence
The question arises as to why a tank manufacturer, of all companies, would buy up large parts of its supplier with KNDS.
According to the
SZ
, this is about pure control.
Behind KNDS are the Munich-based group Krauss-Maffei Wegmann (KMW) and Nexter, a defense company from France.
“We should ensure that Renk remains independent,” the newspaper quoted a company spokesman as saying.
Renk still owns the majority of Triton, a German-Swedish financial investor.
The explanation seems logical: large corporations are dependent on the products of their suppliers, and if they are bought by third parties, they could interrupt the supply chain or otherwise ensure that the large corporation no longer receives the goods it needs.
So it's about nothing less than the company's security interests.
Experts have been calling for closer cooperation between the European defense industry for years.
The special position of the German armaments specialists
Defense companies currently have a fairly sensitive position.
It has been clear since 2014 at the latest that Russia, for example, is not afraid of attacking its neighbors; further north of Ukraine, Russia is already rattling its sabers in the direction of the Baltics and Finland.
For countries, a functioning defense industry means both a stronger economy and protection.
It was not until 2022 that the German government responded with a special budget of 100 billion euros for the Bundeswehr.
Experts spoke of a “deplorable” state of the defense industry in Europe, not least in connection with the lack of arms deliveries to Ukraine.
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The news that the federal government is exploring investing in the shipyard group Thyssenkrupp Marine Systems (TKMS) also fits in with this cooperative behavior in the defense sector.
This produces, for example, warships and submarines, also for the Bundeswehr.
Pierroroberto Folgiero, head of the Italian shipyard group Fincantieri, had also already offered the shipyard subsidiary closer cooperation.
And then there is the takeover of the Munich arms specialist ESG by the supplier Hensoldt, which was announced in December last year.
“By combining our highly compatible capabilities, we are taking a decisive step towards becoming the leading European provider of seamless solutions,” said Thomas Müller, CEO of the HENSOLDT Group.
The purchase price: 675 million euros.
Problems in the defense industry
The local arms industry in particular is struggling with some political inhibitions.
The Federal Association of the German Security and Defense Industry had identified the coalition party the Greens as a major factor in weakening exports to third countries.
“Politically, this leads to the strange situation that the Federal Chancellor and the Federal Defense Minister are actively striving for good arms relations with countries in Asia (India, Indonesia, Singapore), for example, but in this specific case export applications for these countries in the BMWK and AA are being postponed until These countries declare to the German supplier that they are no longer interested in a supply relationship with Germany,” explained Dr.
Hans Christoph Atzpodien, General Manager at BDSV, in an association report.
Arms exports must be carried out with a “security policy sense”.
At the same time, it must be clear that Germany can only fulfill its role in the EU and NATO if it “continues to have a strong national security and defense industry.”
This cannot exist competitively without exports - including to third countries.