Military surplus

17 December 2020 By Liam Proud Follow @liamwardproud

The buyout firm is selling 25% of defence supplier Hensoldt to the government, which wants to block foreign buyers. Such trades usually incur a discount, but at $550 mln KKR is getting a rich premium. Dealing with increasingly activist states brings opportunity as well as risks.

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The German government will buy a 25.1% stake in military supplier Hensoldt for 450 million euros, the defence ministry said on Dec. 16. The move is designed to deter potential foreign takeovers of the company, which makes radar systems and other electronic components designed for defence.

The government will buy the stake from KKR, whose holding will reduce to 43% from around 68%. The private equity group originally bought Hensoldt as a carve out from Airbus in 2016, and floated the business on the Frankfurt Stock Exchange in September at a 1.3 billion euro market capitalisation.

Hensoldt shares were up 2.3% at 14.49 euros by 0950 GMT on Dec. 17.

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