Thyssenkrupp Spins Off Submarine Builder TKMS
But it is still keeping a majority stake
After start-and-stop attempts to find a buyer for naval shipbuilding division TKMS, German industrial conglomerate Thyssenkrupp has decided to spin the storied sub builder off as an independent publicly-listed business. There is a catch, as Thyssenkrupp will keep 51 percent of the new entity's shares.
TKMS is the inheritor of Kiel's Germaniawerft (HDW) shipyard. The company today is a major manufacturer of non-nuclear submarines, and it exports advanced air independent propulsion models. It also owns the Wismar shipyard formerly run by MV Werften, as well as the defense and submarine systems company Atlas Elektronik, and competes for surface warship contracts as well as submarines.
Rumors of a spinoff for TKMS have circulated on and off since at least 2020, and last year a private sale appeared to be taking form. U.S. private equity giant Carlyle Group began a serious due-diligence review of TKMS with Thyssenkrupp's assistance in early 2024, and appeared to be moving towards some form of an investment agreement. But in October 2024, Carlyle confirmed that it had called it off and ended discussions about an acquisition of TKMS.
In June 2024, Italian cruise and defense giant Fincantieri also reportedly had a look at TKMS as a possible acquisition target. That deal did not ultimately come to fruition either.
As a final alternative, Thyssenkrupp decided to put a proposal before its shareholders to spin off TKMS as a majority-owned, independently-listed business. This structure will allow TKMS to function as a distinct, focused business and market itself to investors, bankers and any potential future M&A partners.
Shareholders approved this spin-off at a virtual general meeting on Friday. Current shareholders of Thyssenkrupp AG (the parent company) will be allocated a total of 49 percent of TKMS shares at a predetermined ratio, while Thyssenkrupp AG will retain 51 percent. The spun-off TKMS will be publicly listed and will make its debut on the Frankfurt Stock Exchange in mid-October, after review and approval by German financial regulatory agency BaFin.
Top image: Israeli submarine INS Tamil under construction at HDW Kiel, later part of TKMS (Marco Kuntzsch / CC BY 3.0)