France and Germany reach agreement on governance of European defense company

Paris, June 22 (KUNA) -- France announced on Monday that the French and German governments have reached an agreement on the strategy and governance of a European defense manufacturing company, a decisive step toward strengthening joint sovereignty in land defense. The French Presidency said in a statement that the agreement will focus on KMW and Nexter Systems, known as KNDS, and that it aims primarily to make both countries equal shareholders through transactions designed to achieve equal ownership levels for both nations. The statement clarified that the agreement and the treatment are subject to approval by the German parliamentary budget, and that under the deal both countries will safeguard their rights as shareholders and as sovereign states. It added that the agreement’s core principles are based on a long-term commitment by the shareholders, equality in governance rights, appropriate oversight of security matters, and periodic reviews of the two countries’ shareholdings and their potential future evolution. The statement noted that the agreement also paves the way for a potential initial public offering of KNDS in the near future. It considered the agreement a new and important stage for KNDS, which was established in 2015 through the merger of KMW and Nexter Systems, and said that “the shared ambition of France and Germany is clear in developing KNDS into a leading European and global defense company that serves the French and German armed forces, contributes to enhancing the competitiveness of the European land systems industry by expanding its capabilities and offerings, and strengthens French and German industrial, technological, and military sovereignty through continuous innovation.” It added that the agreement reflects both countries’ shared resolve to enhance Europe’s industrial and defense capabilities, support their armed forces, and consolidate European sovereignty in the long term. The statement pointed out that the agreement opens a new chapter in the strategy for joint nuclear defense, while providing a robust framework for its future development, considering that “in an era of accelerating armament and technological competition, this agreement represents a decisive step toward a more sovereign Europe.” (End) M.B. / F.S.