KMW-Nexter defense merger completed

Dec 15, 2015, 9:47 AM EST
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Source: Combat-Camera-Europe/flickr

A big Franco-German merger is reshaping the European defense scene.

Reuters writes:

A merger between German armored vehicles maker KMW and its French counterpart Nexter has been completed, the companies said in a joint statement on Tuesday, following more than a year of talks on a tie-up. French financial daily Les Echos reported on Sunday that the deal might be scuppered due to a dispute over the appointment of a new joint chief executive. However, the companies confirmed in the statement that the manufacturers had come together under a Dutch-incorporated holding company. The merger of state-controlled Nexter Systems and privately-held Krauss-Maffei Wegmann GmbH & Co KG combines the Leclerc and Leopard tank brands in what could be a blueprint for more European defense consolidation. KMW and Nexter each employ more than 3,000 people worldwide. KMW supplies wheeled and tracked fighting vehicles to 30 nations and expects sales of 2 billion euros ($2.2 billion) in 2016, while Nexter is a maker of systems, ammunition and equipment with sales of 1.05 billion euros last year.

Europe Online Magazine reports:

Headquarted in Amsterdam, The Netherlands, Newco will produce armoured vehicles with 6,000 employees and a turnover of about 2 billion euros (2.2 billion dollars). KMW and Nexter are known for their Leopard and Leclerc tanks. The state-owned Nexter and private KMW had to secure approval from competition authorities and other oversight agencies in their respective countries before the deal, announced in July, could go through.
The tie-up prompted severe criticism from opposition parties in Berlin including the Green and Die Linke parties, with critical voices arguing that German export rules for defence products may be circumvented. KMW said that the entity would operate under Dutch law.

 

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