The German state is seeking a 40% stake in the tank and weapons maker KNDS, government sources familiar with the matter revealed to AFP on Wednesday.
According to an "agreement reached regarding the state's participation in KNDS", this stake is to start at 40% and then be reduced to 30% within "two to three years", a source said.
KNDS is currently effectively controlled by the French state, as it is part-owned by French public holding company GIAT Industries, with Germany's Wegmann family owning the other part.
The company had been planning an initial public offering, at a time when defence stocks are booming with Europe racing to re-arm. The German government had said it was examining an investment in the group, in a bid to gain more influence over it.
Under the agreement, Germany will obtain the same rights as the French state, including after its stake is lowered, the source said.
