The stock index of European arms manufacturers is at its highest level. Strnadova zbrojovka is significantly reshuffling the deck.

The owner of Czechoslovak Group wants to build the largest defense industry company in Europe.

Michal Strnad, Chef der Czechoslovak Group, plant Erweiterung. Foto: ČTK / Glück Dalibor / Profimedia

The Czech arms manufacturer, which has a significant presence in Slovak industry, is finalizing its plan to list on the Amsterdam stock exchange. Czechoslovak Group (CSG) wants to raise at least €3 billion in capital there. According to Bloomberg's calculations, this would be the largest initial public offering of any arms company in the world.

The listing of shares on the Amsterdam stock exchange could create the largest Czech publicly traded company. For now, however, it appears that the market capitalization of the arms group will not be enough to surpass the current leader, the energy company ČEZ.

ČEZ currently has a market value of more than €30 billion, while investors see the Czechoslovak Group's valuation after its IPO at around €26.5 billion, according to Bloomberg. However, if geopolitical tensions continue to intensify, the Czechoslovak Group could soon become more valuable than the energy giant after its IPO.

Index at its highs

This scenario is supported by the development of the composite index of European arms industry stocks, which has been compiled by the American bank Goldman Sachs for more than twenty years. This indicator closed on Monday at its historic high of nearly 11,800 points.

The index boomed last year after US President Donald Trump returned to the White House. Since the beginning of his second term as US president, Trump has questioned the purpose of NATO and, in the eyes of many, cast doubt on the US military's participation in any allied actions.

At the same time, he has pushed the alliance's allies to commit to increasing defense and related spending to five percent of gross domestic product over ten years. Such a commitment is grist to the mill not only for European arms manufacturers.

At the beginning of this year, European arms manufacturers' shares are rising, mainly due to events surrounding Greenland, which Trump would like to acquire for the United States. Scandinavian arms manufacturers such as Norway's Kongsberg and Sweden's Saab could benefit most from this.

The American financial company Morningstar forecasts that the shares of European arms manufacturers it covers will appreciate by an average of 20 percent this year, despite significant growth in recent years.

First place in the world in sales growth

In 2024, the Czechoslovak Group recorded dizzying growth in sales of weapons and related services, specifically 193 percent to $3.6 billion. This puts the industrial and technological holding company at the top of the list of the world's 100 largest arms manufacturers and suppliers of related services, compiled by the Stockholm-based SIPRI institute. More than half of the group's turnover last year was related to the war situation in Ukraine.

The world's 100 largest arms manufacturers together recorded a 5.9 percent increase in sales to a historic record of $679 billion. According to the institute, the record arms sales are mainly the result of the rise of European producers, but American arms manufacturers also grew. Roughly two-thirds of European arms manufacturers increased their production capacity last year.

Michal Strnad, owner of the Czechoslovak Group, revealed the holding company's plans to Bloomberg last December. "I want to build CSG into the largest defense industry company in Europe," he emphasized.

According to Strnad, the arms manufacturer, which produces weapons, ammunition, and military and other equipment, benefits from the fact that none of its competitors has such a broadly diversified production, is so fundamentally export-oriented, or is so significantly independent of its own country's military orders. One of the richest Czechs wants to strengthen his company's advantages, for example, through acquisitions in the drone segment.

The founder of the industrial and technological holding company Czechoslovak Group is Michal Strnad's father, Jaroslav.

The group's history began in 1995 when Jaroslav Strnad founded Excalibur Army. The company originally dealt in military equipment and technology that the state was decommissioning after the end of the Cold War. It gradually expanded to include manufacturing and repair capacities in the Czech Republic and Slovakia.

The text was originally published on the website lukaskovanda.cz. It has been expanded with quotes from two other articles.