The owners of Germany’s Krauss-Maffei Wegmann (KMW) and France’s Nexter Systems (Nexter) on Tuesday signed a Heads of Agreement joint holding company to share the path ahead.
The umbrella alliance creates a Franco-German defense technology group with a current annual turnover nearing $2.7 billion, an order book of around $8.8 billion, with more than 6,000 employees. It is expected to be complete in 2015.
KMW, Nexter and their owners view this step as decisive for the consolidation of the defense technology industry in Europe. Their new strategic alignment makes it possible to retain jobs and skills within the European Union.
The product portfolios of the two companies and their regional presences on the world market complement each other, the companies said in a statement.
The alliance of KMW and Nexter creates a group with the momentum and innovative force required to succeed and prosper in international competition, the two companies said in disclosing the alignment.
In addition, the new entity offers to its European and NATO customers the opportunity of increased standardization and interoperability for their defense equipment, with a dependable industrial base.
Nexter S. A. is in the sole ownership of the French State holding company GIAT Industries S.A.; Krauss-Maffei Wegmann GmbH & Co. KG is in the sole ownership of Wegmann GmbH & Co. in Kassel, Germany.
For the intended unification of the two companies, the current sole owners intend to contribute their shares into a newly incorporated joint holding company. They will each receive 50 percent of the shares of this holding company, which will become the sole shareholder in KMW and Nexter. The governance of the holding company will take into account the balance between the two shareholders, who will be reference investors in the new combined group with a long-term industrial perspective.
Until the unification is complete, the two future partners will both be subject to a process of due diligence. The alliance project will be subject to legal and customary regulation approvals.
