Report: TKMS Seeks More Capacity by Acquiring German Naval Yards Kiel
A month after completing a spin-off to become an independent publicly traded company, Germany’s naval shipbuilder TKMS is reported to be pursuing the acquisition of German Naval Yard Kiel, both for expansion and consolidation in naval shipbuilding. The German news outlet Kieler Nachrichten reports that advanced negotiations are nearly complete for the acquisition from the French group CMN Naval to combine the two Kiel-based shipbuilders and expand TKMS’s product reach.
Management of German conglomerate Thyssenkrupp and TKMS had said the spin-off of the shipbuilder was designed to position it for growth. They suggested as an independent company, TKMS could further pursue consolidation in the industry.
Analysts point out that the combination of TKMS and German Naval Yards would be well-suited. TKMS builds submarines in Kiel, adjacent to German Naval Yard’s facilities, which focus on large and technically complex surface naval ships such as corvettes, frigates, and OPVs, as well as a repair and maintenance business and building luxury yachts.
German Naval Yards has been in operation since 1838 as Howaldtswerke and later Howaldtswerke – Deutsche Werft Aktiengesellschaft (HDW) after a 1967 consolidation in the industry. The company took its present form in 2005 as the group split into surface shipbuilding, separate from the submarine operations, which became TKMS. The German Shipyards Group was launched in 2009 and consolidated with the surface shipbuilding operations in 2011.
It continues to build frigates for the German Navy as well as maintenance operations. The company, in addition, the news report points out, has leased space and personnel to TKMS. It has also collaborated with NVL (Naval Vessels Lürssen) on projects.
TKMS has been actively seeking additional capacity. In 2022, it acquired the facilities in Wismar from the bankrupt MV Werften. It leased the building hall for the completion of the cruise ship, which became Disney Adventure, and since the cruise ship departed the yard earlier this year has the full operations in Wismar.
The move comes as Germany, along with other nations, is expected to dramatically increase spending to expand naval capacity. As a leader in submarines and vessels such as corvettes, TKMS is also competing for large international contracts, including from Canada and Poland.
The naval shipbuilding industry is consolidating ahead of the anticipated surge in orders. Earlier this year, the Lürssen Group agreed to sell NVL to German defense contractor Rheinmetall. Lürssen, like German Naval Group, builds and repairs surface vessels and separated its business a few years ago to put its yacht construction into a separate business. Lürssen plans to continue its yacht business after the sale of the naval shipbuilder.