Federal Republic of Germany Decides to Invest in Hensoldt AG
(Source: German Ministry of Defence; issued Dec. 17, 2020)
Unofficial translation by Defense-Aerospace.com)
In order to protect the national security and key defense industry technologies defined in the Federal Government's strategy paper of Feb. 12, 2020 on strengthening the security and defense industry, the federal government, represented by the Federal Ministry of Defense, is planning to acquire a participation of 25.1% (blocking minority), subject to antitrust and state aid reviews, in Hensoldt AG at a price of 450 million euros.

This was approved today by the government Cabinet.

Background

Ensuring the protection of the key technologies of the defense and security industries, as defined in the above-mentioned strategy paper, is of particular national interest. Because of this, the federal government has decided to take a strategic stake in Hensoldt AG.

In addition, it is important that Germany's role as a cooperation and alliance partner in Europe in the context of globalized supply chains is technologically and economically secured and further strengthened.

Particularly noteworthy are:
-- the importance of the company in terms of industrial, security and defense policy,
-- its high relevance for the technological and digital sovereignty of Germany as well
-- the great importance for the efficiency and operational readiness of the Bundeswehr.

The ongoing development of the sensitive activities of the Hensoldt Group, and their continued availability for civil security organizations and the Bundeswehr, must not be impaired by future entrepreneurial measures by Hensoldt AG or its current and future owners.

The federal government has therefore decided to acquire 25.1 percent of the shares, the so-called blocking minority. This enables the federal government to ward off unwanted structural decisions. It also means that the federal government has considerable influence, regardless of whether strategic investors can directly or indirectly acquire a large part of the shares, and can thus exercise a guiding influence.

An appropriate fixed price has been agreed with the investor KKR for the shares in question.

The Federal Ministry of Defense, in close coordination with the Federal Ministry for Economic Affairs and Energy, the Federal Ministry of the Interior, Building and Home Affairs and the Federal Ministry of Finance, has created the necessary conditions for the federal government to participate in Hensoldt AG.

The Federal Government approved this procedure today.


(EDITOR’S NOTE: Hensoldt, formed from various electronics businesses when Airbus was restructured, is a major supplier of electronic systems to major German and European defense programs. KKR bought the company in 2016, and retained a stake of more than 60% after the IPO.
Interestingly, the German government has obtained a better price that expected, as press reports variously quoted prices of between 400 million and 464 million euros.)


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