Report: Lürssen’s Naval Shipbuilder Target for German Defense Consolidation
Media reports in Germany are highlighting the potential for the sale of the shipbuilder NVL (Naval Vessels Lürssen) to defense industry major Rheinmetall as part of the further consolidation in the defense sector. The German government is reported to be encouraging the industry to explore steps to enhance its capabilities to meet the country’s urgent needs.
Rheinmetall, a manufacturer of tanks and ammunition, has in the past expressed interest in entering the naval shipbuilding sector. The company is now reported to be in discussions with NVL to acquire the operation, which is one of Germany’s leading naval shipbuilders.
The supervisory board of Rheinmetall is reported to be set to discuss the acquisition, writes the German newspaper Bild. The news outlet NDR followed up on the reports by speaking with the company’s CEO during an event on Wednesday, August 27. NDR reports he responded by saying, “We are always interested in expanding our product portfolio…We will only talk about it once decisions have been made.”
The German government has been encouraging the industry to explore opportunities while saying it needs to increase the country’s defense capabilities and to do so quickly. NVL is a current partner in the new frigate program with Damen that has become mired in problems with its electronics. Germany’s defense ministry has said it will look to rapidly grow its naval operations based on the increased dangers in the Baltic and North Sea.
The German Press Agency (dpa) reports Lürssen sent a letter to its workforce saying, in response to the needs of the government, it has “decided to intensify consolidation talks.”
Bild reports that the family that controls Lürssen is looking to focus on the company’s yacht shipbuilding operation. The group separated in 2021, putting Lürssen’s yacht and naval businesses into independent units. Lürssen also recently completed the sale in June of its naval shipbuilding operation in Australia to the local company Civmec.
NVL is the product of consolidation in the naval shipbuilding sector. Lürssen and German Naval Yards Keil agreed in 2020 to consolidate their operations. NVL’s operations now consist of four leading yards, including Peene-Werft in Wolgast and Blohm+Voss in Hamburg. Norderwerft in Hamburg and Neue Jadewerft in Wilhelmshaven are dedicated to repairs, refits, and modernisations of naval vessels and auxiliary ships. The products include a specialization in corvettes and patrol boats as well as frigates, minesweepers, and coast guard vessels, both domestically and internationally.
TKMS (Thyssenkrupp Marine Systems) and German Naval Yards are the other two large competitors in the sector. Media reports suggest that Rheinmetall was one of the potential suitors that also looked at TKMS as Thyssenkrupp was considering alternatives for the company before settling on the plan to spin off the naval shipbuilder later this year to shareholders.