07 December 2021

Thyssenkrupp might shed naval business

by Marc Selinger

Thyssenkrupp's naval products include the F125 frigate. (Thyssenkrupp Marine Systems)

German industrial conglomerate Thyssenkrupp is exploring divesting its Marine Systems (TKMS) business to facilitate consolidation in the fragmented European naval shipbuilding industry.

One option under consideration is to combine TKMS with another shipbuilder, Thyssenkrupp said on 2 December. Another is to turn TKMS into a standalone entity, which could ultimately lead to a merger with another shipbuilder. The TKMS review is in an early stage, according to Thyssenkrupp CEO Martina Merz.

TKMS builds submarines, surface ships, and electronic systems for naval customers. In fiscal year (FY) 2020–21, which ended on 30 September 2021, the business generated sales of EUR2 billion (USD2.3 billion), an 11.1% increase from the previous year, fuelled by surface ship deliveries to the German and Israeli navies. Its adjusted earnings before interest and taxes rose 30% to EUR26 million, and its order intake more than tripled to EUR6.7 billion.

Two other German shipbuilders – Lürssen Group and German Naval Yards Kiel – announced in May 2020 that they had agreed to combine their naval activities into a joint company to increase their efficiency and scale. The parties are still discussing how to carry out the merger, a Lürssen spokesperson told Janes on 6 December.

German naval expert Sebastian Bruns, who is the inaugural McCain Fulbright visiting professor at the US Naval Academy in Annapolis, Maryland, said that Dutch shipbuilder Damen's 2020 win in Germany's F126 frigate competition has spurred German shipbuilders to pursue consolidation to increase their competitiveness.

The Damen contract award “was basically a watershed moment for the German shipbuilding industry”, Bruns told Janes

German industrial conglomerate Thyssenkrupp is exploring divesting its Marine Systems (TKMS) busines...

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