In 2024, the S&P Defense & Aerospace (D&A) sector index surged year-on-year to 35.24%, fuelled by escalating geopolitical tensions, rising defence budgets, and investors seeking safe-haven assets amid global uncertainty.

The election of Donald Trump as the 47th president of the United States will likely see the index continue its upward trajectory, given his combative language on NATO and member country spending.

A White House push for European allies to meet or exceed the 2% GDP defence spending target is set to drive demand for military hardware, benefiting the sector’s biggest players.

Despite the index’s rise last year, D&A ECM volumes in EMEA in 2024 reached just USD 1.4bn.

While the figure was far below the ten-year height of USD 5bn seen in 2015, it was a slight improvement on 2023’s figure of USD 1.3bn.  

Historically, 2015 was the strongest year for D&A ECM activity in EMEA, with Airbus Group SE’s [EPA:AIR] selldown in Dassault Aviation SA [EPA:AM] (USD 1.9bn deal value) and the Republic of France’s disposal of shares in Safran SA [EPA:SAF] (USD 1.2bn) boosting the total figure to USD 5bn.

The modest uptick was largely driven by the IPO and subsequent selldowns of RENK Group [VIE:RENK] by Triton Partners, which accounted for USD 1.2bn of total D&A volumes last year.

This sort of deal activity is expected to continue to grow.

In EMEA, German-French armaments company KNDS is in the IPO pipeline, as previously reported.

Despite increased defence spending, the number of IPOs is likely to remain limited due to high interest rates and political sensitivities surrounding the sector, continuing a trend seen over the last decade. RENK remains the largest defence listing of the period.

With war chests filling up across Europe and defence stocks rallying, investor appetite remains strong. Whether 2025 brings a fresh fusillade of IPOs or a misfire remains to be seen.