KNDS explores takeover of Mercedes and Volkswagen plants amid defence expansion push

Thursday 14 May 2026 - 12:00

The Franco-German defence company KNDS is reportedly in discussions to take over industrial facilities owned by major German carmakers, as the defence sector seeks to expand production capacity.

According to media reports, KNDS is in talks with Mercedes-Benz Group regarding the possible acquisition of a plant located in Ludwigsfelde, near Berlin. The facility currently produces commercial vehicles and employs around 2,000 workers. Under early discussions, KNDS could initially lease parts of the site before potentially transitioning to full control, allowing military vehicle production alongside existing automotive operations.

The defence manufacturer is also reportedly examining the possibility of acquiring a site belonging to Volkswagen Group in Osnabrück. The plant is expected to undergo changes as the company reassesses its production strategy in the coming years.

These discussions reflect a broader trend in Europe, where defence companies are seeking to expand manufacturing capacity amid rising military spending and geopolitical tensions. At the same time, parts of the automotive industry are facing restructuring pressures due to the transition toward electric vehicles and changing global demand.

Neither KNDS nor the involved automotive companies have confirmed the details publicly, but they acknowledge ongoing discussions regarding future use of industrial sites. Analysts note that converting automotive factories into defence production hubs could help preserve jobs while meeting growing demand for military equipment in Europe.