European defence groups in talks to buy stake in Germany's Hensoldt

FILE PHOTO: Trading information for KKR & Co is displayed on a screen on the floor of the New York Stock Exchange (NYSE) in New York, U.S., August 23, 2018. REUTERS/Brendan McDermid

FRANKFURT (Reuters) -German military sensor maker Hensoldt said that its largest shareholder, buyout group KKR, is soliciting bids for a 25.1% stake among major European defence contractors.

KKR is in advanced discussions with companies, including France’s Thales and Italy’s Leonardo, Indra of Spain and Sweden’s Saab , Hensoldt said in a statement on Wednesday.

Hensoldt said it had “held discussions regarding their strategic intentions, among other things,” with the suitors.

People close to the matter told Reuters earlier on Wednesday that KKR was soliciting bids for a large stake in Hensoldt as it looks to exit the German defence supplier following the company’s 2020 stock market listing.

The private equity company, which owns 43% of Hensoldt, earlier this year had offered a large stake to European defence groups including Thales and Leonardo, the sources said.

Any deal is being complicated by “golden” shares in the company held by the German government, which has expressed concerns in the past about keeping jobs and technology in Germany, the people said. The shares give Berlin powers to block decisions concerning the company.

The talks were first reported by Manager Magazin.

Reporting by Arno Schuetze and Alexander Hübner. Additional reporting by Ludwig Burger, Gwenaelle Barzic and Francesca Landini. Editing by Mark Potter and Jane Merriman