(Bloomberg) --
The German government will buy a 25.1% stake in defense supplier Hensoldt AG from KKR & Co. for 464 million euros ($562 million), Reuters reported Saturday, citing people familiar with the matter.
The purchase is intended to prevent a foreign buyer from taking control of Hensoldt, according to the report. KKR retained a stake of more than 60% in the company following an initial public offering in September.
Beate Baron, a spokeswoman for the German Economy Ministry, said she was not authorized to confirm or deny the report, citing government policy of not commenting on individual cases. Hensoldt and KKR did not immediately respond to emailed requests for comment.
The German government has the power to block unwanted takeovers that present potential interference and security threat. The state had the option to buy the Hensoldt stake from KKR for a maximum price of 600 million euros.
Read more: Germany Moves to Shield Key Companies From Foreign Takeovers
KKR acquired Hensoldt, formerly known as Defense Electronics, from Airbus SE in 2017. The company makes radars for fighter jets, submarine periscopes and night vision systems for battle tanks and is betting on increased demand for electronic content in military equipment.
Hensoldt shares rose 4.1% on Friday to the highest level since the late-September IPO. That valued the company at just shy of 1.4 billion euros.
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