PARIS — France edged forward to the planned 50-50 joint venture between Nexter and German partner Krauss-Maffei Wegmann with the July 9 parliamentary adoption of privatization of the state-owned land weapons manufacturer.
A privatization of Nexter was among a package of measures proposed by Economy Minister Emmanuel Macron aimed at liberalizing an ailing domestic economy. The parliamentary upper and lower houses have now adopted the Macron law, which drew opposition from both conservative and left wing politicians.
KMW and Nexter are in talks to forge a joint holding company that would be a European leader in land armaments with annual sales of almost €2 billion (US $2.2 billion). The planned joint venture, to be based in Amsterdam, is named KMW And Nexter Together, or KANT.
Nexter and KMW managers are negotiating and hope to sign the alliance agreement this month, an industry executive said. "The negotiations are moving ahead," the executive said.
At the July 9 board meeting of Giat, the state-owned holding company of Nexter, 12 out of 18 board members voted in favor of the link-up, while three trade union representatives abstained and three voted against, said a note from Confédération Française Démocratique du Travail, one of the unions that abstained. The CFDT is worried about the employment outlook.
KMW Chairman Frank Haun told May 21 a defense conference held by business daily Les Echos on May 21 he hoped the deal could be sealed by July 14 and see the French Leclerc and German Leopard tanks take part in the military parade on the avenue Champs EÉlysées, which marks the national holiday.
However, a defense official said the deal is not ready for a July 14 announcement on July 14, a defense official said.
The French state shareholders, represented by the Direction Générale de l'Armement procurement office and the Agence des Participations de l'Etat, the government shareholding agency, see the alliance creating a critical mass, generating company funds to launch studies and expanding the product range, CFDT said in a July 6 note. Other benefits include cutting manufacturing costs, creating the largest European builder of land armaments, expanding in the export market and boosting the sales effort, the note said.
The Macron law now goes to the constitutional council for scrutiny and, if there are no objections, will be published in the Official Journal. Once published, the law goes into effect.
The Bavarian-based Bode family controls KMW through the Wegmann firm.