Thyssen-Krupp wants to prepare its shipyard division for the stock market.
(Photo: dpa)
Berlin, Dusseldorf The Thyssen-Krupp industrial group is preparing to spin off its shipyard division. At a special meeting on Friday, the supervisory board approved the plans to separate Thyssen-Krupp Marine Systems (TKMS), the Handelsblatt learned from circles in the supervisory body. The subsidiary is the world’s leading manufacturer of conventional submarines – interest is correspondingly high. Financial investors are said to have already submitted non-binding offers.
At first glance, the preparations for secession come as a surprise, as defense budgets are increasing worldwide with Russia’s attack on Ukraine. According to industry experts, TKMS – formerly Howaldtswerke-Deutsche Werft (HDW) – should benefit significantly from the development. But the parent company cannot afford its offshoot in Kiel, as the development of new naval units requires significant investment sums.
For this reason, Thyssen-Krupp has started looking for a new owner, according to company circles. The driver here is Oliver Burkhard, who is responsible for the Human Resources and Marine departments on the Management Board. Together with the TKMS management team, he is creating the conditions for a spin-off, said a supervisory board member who wished to remain anonymous. Thyssen-Krupp has so far not wanted to comment on the process on request.
In the past few weeks, Burkhard’s team has held talks with a number of interested parties. In the industry itself, several armaments companies are willing to acquire a stake. However, there are reservations about Naval from France and the Swedish Saab Group, as this technology is allowed to withdraw from Germany, said a person familiar with the processes. “The federal government would not go along with that.”
A merger with a competitor would not advance TKMS in substance either. First of all, the subsidiary must continue to develop independently, which includes not only improving profitability but also signing new contracts. In addition to the Netherlands and India, new orders could come from the federal government in particular. In addition to new submarines, the Bundeswehr is also to receive new frigates, for which TKMS is considered the likely contractor in the industry.
Selling is not a sure-fire success
In order for the shipyard to be ready for the production of new naval units, however, investments have to be made and the work processes have to be rearranged: “Preparations have started, but some housework is still necessary,” according to company circles.
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On the way to independence, the group relies on the involvement of financial investors. These could acquire a majority stake in the company and help TKMS prepare for the IPO. Ultimately, this would be the best place for a completely renovated group of shipyards, it was said in the circles. Hensoldt is a role model. Airbus had spun off the radar manufacturer and sold it to financial investors; Hensoldt was recently promoted to the MDax.
Financial investors have already submitted non-binding offers for TKMS. A possible assessment does not initially exist, according to financial circles. To do this, the bidders would first have to get an insight into the books.
Selling TKMS is not a sure-fire success. The parent company has to make firm commitments to the customers – countries like Norway or Israel – and assume the corresponding financial guarantees. The amount adds up to well over five billion euros. Financial investors cannot shoulder this, otherwise the business is not worthwhile for them, as one participant reports.
Now it is being considered that the federal government will step in as a guarantor. The risk of failure is low because the customers really wanted the submarines in this environment, it said. Politicians would still have to be convinced of the plan. The most important argument, as the person involved reports, is that the federal government itself should be interested in a functioning shipyard landscape. This would be possible with a TKMS split off and strengthened by the parent company.
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