German shipbuilding poised for shakeout

17th May 2004, Comments 0 comments

17 May 2004 , ESSEN – Germany's shipbuilding sector is facing a major shakeout with the announcement Monday of plans by the ThyssenKrupp concern to merge its shipyard business with that of US company One Equity Partners (OEP). A new group comprising shipyards in Germany, Sweden and Greece would emerge to combine for some EUR 2.2 billion turnover and 9,300 employees, according to the plans unveiled by ThyssenKrupp subsidiary TK Technologies in Essen. ThyssenKrupp and OEP, majority owners of the major milita

17 May 2004

ESSEN – Germany's shipbuilding sector is facing a major shakeout with the announcement Monday of plans by the ThyssenKrupp concern to merge its shipyard business with that of US company One Equity Partners (OEP).

A new group comprising shipyards in Germany, Sweden and Greece would emerge to combine for some EUR 2.2 billion turnover and 9,300 employees, according to the plans unveiled by ThyssenKrupp subsidiary TK Technologies in Essen.

ThyssenKrupp and OEP, majority owners of the major military vessel shipyard Howaldtswerke-Deutsche Werft (HDW) in Kiel, signed a letter of intent to fuse their shipbuilding operations.

The two sides hope to have the deal ready for signing by July, with the merger then subject to approval by cartel authorities.

Besides HDW, in which OEP gained a 75 percent stake in 2002, the shipyards which would make up the new group would include the German firms Blohm & Voss in Hamburg and Nordseewerke in Emden, as well as the Swedish shipbuilder Kockums and Hellenic Shipyards in Greece.

The future concern would be held to 75 percent by TK Technologies and to 25 percent by OEP, with OEP also to receive EUR 240 million in cash from ThyssenKrupp.

It was noted that the TK shipyards of Blohm & Voss and Nordseewerke have already been cooperating with HDW in the construction and sale of submarines, frigates and corvettes.

A spokeswoman for TK Technologies cautioned that job reductions would likely result from the merger.

The plans come amid problems facing the German shipbuilding sector, particularly the tough pricing competition posed by Far Eastern shipyards, and by tonnage limits set under European Union rules.

Initial reaction to the plans was positive.

Bernd Rohwer, the Social Democratic economics minister of the northern German state of Schleswig-Holstein where the HDW shipyards is based, said the merger would create a "potent" force in German shipbuilding.

"After all the debate of recent years there are now certain prospects for HDW and its employees," Rohwer said.

At the metalworkers union IG Metall, regional director Frank Teichmueller also welcomed the news, saying that a fusing of the strengths of each production site was important in view of the tighter competition resulting in part from high state subsidies.

Four years ago the German government had been pushing for an alliance in the country's shipbuilding sector in order to assure that marine and defence technology know-how would remain in the country and not fall prey to foreign interests.

 

DPA

Subject: German news 

 

 

 

 

 

0 Comments To This Article