Defence, break in negotiations between Leonardo and Knds for tank alliance
Stop due to disagreements over work allocation to the Italian group
3' min read
Key points
3' min read
The Franco-German group Knds has announced the end of negotiations to formalise the alliance with Leonardo that had been under discussion for six months, as was foreseen in a letter of intent signed on 13 December by the two companies. The failure of the negotiations was then confirmed by Leonardo in a statement.
The cause of the break
.The main reason for the rupture is the failure to agree on the so-called 'Italianisation' of future Leopard tanks which - according to the objectives of the supposed alliance - could have been purchased by the Italian Army, i.e. the transfer to Italy of work that is now being done in Germany.
The Leopard 2 A8
.The main object of this partnership was supposed to be the Leopard 2 A8 tank and its supply to the Army, a potential order worth EUR 8 billion, which was the basis of the collaboration project. The Army would have to make an international tender to replace the old Ariete heavy tanks, made by the former Finmeccanica through Oto Melara. But in the case of an alliance between Leonardo and Knds, the Leopard would have been by far the favourite to be chosen.
The disagreement
.The disagreements arose from Knds' refusal to give Leonardo the construction of parts of the Leopard that are now made in Germany. In particular, Leonardo asked to build the turret and to make electronic parts, through Oto Melara and the German company Hensoldt, in which it owns about 23%. Knds would have proposed to make only less impportant components of the 'Italian' Leopard.
Knds and Leonardo's notes
.As explicitly stated in the press release, Knds did not want to touch the Leopard 2 standard 'safeguarding its configuration'. Said CEO Frank Haun:' With 18 European user countries, the Leopard 2 is the standard tank on our continent and in NATO. It is more important than ever to safeguard this standard, which makes a significant contribution to the interoperability and joint combat power of the European and NATO armies. The parties were unable to agree on the configuration and, as a result, negotiations on Leonardo's strategic participation in Knds also failed. Yet Knds remains committed to supporting the Italian Army'.
