Carlyle Ends Bid to Acquire German Naval Shipbuilder TKMS from Thyssenkrupp
American private investment firm Carlyle Group has ended discussions to purchase a controlling stake in German naval shipbuilder Thyssenkrupp Marine Services (TKMS) six months after starting a due diligence review. The shipbuilder’s parent company Thyssenkrupp confirmed the development after it was first reported by Reuters and widely covered in the financial media.
The proposed sale is part of a larger plan to bolster the beleaguered German industrial giant which has also been selling other units. After months of speculation regarding the fate of the naval shipbuilding unit, Thyssenkrupp and Carlyle confirmed in March 2024 that they had begun a due diligence evaluating cooperation on the planned separation of the marine business.
“Both companies agreed to enter into an in-depth examination and valuation (due diligence) of Thyssenkrupp's marine business. The subject of this review is a possible partial sale of Thyssenkrupp Marine Systems to Carlyle,” the companies reported.
Thyssenkrupp highlighted that it had begun a strategic review of the marine business in 2023 and was exploring several options and that it would continue to review alternatives. They noted that talks were also being held with the German government on the state's participation in TKMS.
As late as August, Reuters was reporting good progress in the discussions saying that KfW, the German state-owned investment and development bank, had joined in the talks with Carlyle with Reuters reporting a valuation of $1.3 to $1.7 billion for TKMS. Reuters said the companies were targeting completing the deal by September and the close of Thyssenkrupp’s fiscal year.
Thyssenkrupp responded to today’s inquiries from the financial media saying it would continue to pursue the independence of TKMS, possibly through a spin-off of the company. They cite the strong demand for submarines, naval vessels, and surface and underwater technology, saying that it is creating additional growth opportunities for TKMS.
“The independent positioning of the division should enable these opportunities to be better exploited,” Thyssenkrupp said in the past and reconfirmed today. “This independence would also provide a good starting point for possible national and European consolidation.”
The German newspaper Handelsblatt reported in June 2024 that Italy’s Fincantieri had expressed interest in a possible investment in TKMS but would not proceed without assurances from the German government. Fincantieri in June also announced an agreement to acquire the submarine division of Leonardo as it works to expand its role in military systems and specifically subsea operations. A reported proposal from the French Naval Group, known as a leading developed of submarines, for TKMS however was reportedly rejected in Germany because of concerns about intellectual property and jobs.
TKMS operates the largest shipyard in Germany employing around 3,100 people at its facilities in Kiel in addition to smaller facilities in Hamburg, Bremen, and Emden. They previously announced plans to expand investments in the Kiel site as well as an agreement with Germany to take over the Wismar site of the former Genting Hong Kong shipyard MV Werften.
The company dates back more than 185 years but took its current form through the merger of Howaldtswerke-Deutsche Werft (HDW) and Blohm+Voss Naval in January 2013 and the acquisition of Atlas Elektronik in April 2017.