Germany and France have reached an agreement that will allow the German government to acquire a stake in defence manufacturer KNDS, with both countries set to hold equal shares in the company, according to a joint statement released on Monday.
The announcement comes after the European Commission said on Thursday that it has no objections on competition grounds to Germany taking a stake in the Franco-German armaments company.
Berlin aims to acquire a 40% stake in KNDS, which is expected to be reduced at a later stage, government spokesman Stefan Kornelius said. The plan still requires approval from the budget committee of the lower house of parliament.
KNDS manufactures weapons systems including the Leopard 2 main battle tank and the Panzerhaubitze 2000 self-propelled howitzer. The company was created through the merger of Germany's Krauss-Maffei Wegmann and France's Nexter. It is currently owned by the German family behind Krauss-Maffei Wegmann and the French state.
The German government and France's Élysée Palace said they intend to develop KNDS into a leading European and global defence company supplying the armed forces of both countries.
German Economy Minister Katherina Reiche said the federal government's planned 40% stake would help safeguard "key technologies, industrial value creation and jobs in Germany."
She added that Germany and France would in future decide on the company's development on an equal footing, describing KNDS as central to Europe's defence capabilities.
KNDS welcomed the agreement between Berlin and Paris.
