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Thyssenkrupp to spin off marine division amid defence boom / Photo: © AFP
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Thyssenkrupp to spin off marine division amid defence boom
German industrial titan Thyssenkrupp's shareholders on Friday backed a spin-off of its warship and submarine-building unit, seeking to better position the group to benefit from a European defence boom.
Countries have been rearming to face the growing Russian threat and in response to pressure from US President Donald Trump for NATO allies to contribute more to the alliance, giving a boost to the continent's weapons manufacturers.
Thyssenkrupp's establishment of its defence branch as an standalone entity is also the latest move in a restructuring at the storied manufacturer whose other divisions -- notably the traditional steel business -- are facing problems.
"Against the backdrop of the current security situation in Europe and around the world, it is crucial that Germany and its partners can rely on capable, innovative companies such as TKMS (Thyssenkrupp Marine Systems)," said supervisory board chairman Siegfried Russwurm.
Shareholders overwhelmingly backed the spin-off of a 49-percent minority stake of the marine division at a specially convened meeting.
The marine unit will be listed on the Frankfurt Stock Exchange later this year.
The broader Thyssenkrupp group will retain a controlling stake, which it said ensured "the strategic steering and stability of TKMS".
Thyssenkrupp's shares rose two percent in Frankfurt after the news.
"TKMS gains the freedom to drive innovation more rapidly, invest in a targeted manner, and respond flexibly to customer and market requirements," said Thyssenkrupp CEO Miguel Lopez.
The defence division's orders have grown significantly in recent years and the backlog now exceeds 18 billion euros ($21 billion), according to the group.
TKMS represents just a small part of Thyseenkrupp's revenues but its prospects are far brighter than other divisions, particularly the steel business, which is in the throes of a painful restructuring as it battles fierce Asian competition.
Thyssenkrupp announced in May plans for an overhaul that will split the sprawling conglomerate into several standalone businesses, ranging from auto parts to green technologies.
Q.Min--SG
