Non-Subscriber Extract
German yards set to unite as HDW finds new owner
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| 24 May 2004 |
David Mulholland, JDW Business Editor
London
ThyssenKrupp has agreed to buy Howaldtswerke-Deutsche Werft (HDW) from its owner, a US investment bank, in a move that will unite the German naval industry and position it to lead European naval consolidation.
The German government, unions and media have reacted very positively to the agreement.
If the deal goes through, One Equity Partners (OEP), the investment arm of Chicago-based Bank One, will receive EUR240 million ($285 million) and a 25% stake in ThyssenKrupp's shipbuilding business in return for OEP's 75% stake in HDW. The cash value of the deal would only cover HDW's estimated debts. The value of the 25% stake in the ThyssenKrupp shipbuilding group was not released. However, last year ThyssenKrupp's yards had a turnover of EUR970 million and the new combined business should have sales of around EUR2.2 billion a year.
An OEP spokesman refused to comment except to say that the deal was a "win-win" for both companies and that future prospects were promising.
ThyssenKrupp and OEP see the merger as laying the foundation for uniting Europe's naval yards.
"We actively support ThyssenKrupp's strategy of becoming a leading international company in the sector," said an OEP spokesman. "This is the first step to prepare to build up the international group in the future that could include French and US companies."
A ThyssenKrupp official said that further consolidating moves could come in "two to three years, or longer". However, at this stage it is unclear whether that would be through mergers or partnerships.
The tie-up would create a strong competitor to the aspirations of France's DCN and Spain's Izar, which both see themselves as important centres of gravity for consolidating Europe's naval shipbuilding.
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