KKR Sells Defense Firm Stake as Germany Boosts Military Spending
(Bloomberg) -- KKR & Co. sold a stake worth 210 million euros ($233 million) in radar maker Hensoldt AG after Russia's invasion of Ukraine prompted Germany to increase its defense budget.
Shares in the offering priced at 21 euros each, according to terms seen by Bloomberg. This marks a steep discount of 18% to Wednesday's close, leading Hensoldt's stock to sink in tandem with the offer price on Thursday.
The share sale comes days after Germany announced a historic policy shift with plans to pour 100 billion euros into modernizing its military. On Sunday, Chancellor Olaf Scholz pledged to bring the defense budget in line with a NATO target that Berlin has consistently failed to meet.
Read More: Europe Is Rearming, and Its Defense Firms Stand to Profit
European governments are rethinking their military budgets after Russia invaded Ukraine last week, fanning concerns Russia could potentially expand its offensive to other countries. Defense stocks, which had already been moving higher amid mounting tensions earlier this year, have surged over the past week.
The shift in sentiment has lifted shares in Hensoldt, which makes radars for fighter jets, submarine periscopes and night vision systems for battle tanks. As of Wednesday's close, the stock had more than doubled since the start of this year, a big turnaround for the company after initially slumping in its September 2020 trading debut.Â
©2022 Bloomberg L.P.
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