Thyssenkrupp unexpectedly denies agreement
In a surprising turn of events, the German government has decided not to push for a stake in Thyssenkrupp's marine division, TKMS, despite its promising growth prospects. This decision comes as both the Chancellor's Office and the new government's Defense and Economic Ministries have agreed not to seek state involvement at this time.
Thyssenkrupp's Chairman, Siegfried Russwurm, explained that government participation in TKMS is not necessary to safeguard national interests. Germany is either a direct customer or must approve any foreign sales of military equipment, allowing Berlin to exercise control without owning a stake.
Instead of taking equity, the government plans to pursue a "security agreement" that would ensure national defense interests and jobs are protected despite the planned spin-off of TKMS. This agreement would involve regular consultations and grant the government a right of first refusal if a strategic investor attempts to acquire a stake in TKMS.
Thyssenkrupp itself has stated that government investment is not a precondition for going ahead with the planned spin-off of a 49% stake in TKMS, expected by the end of 2025. The upcoming IPO for TKMS is expected to make the company attractive to investors, potentially boosting Thyssenkrupp's share price.
The strong growth prospects of TKMS are a result of increased defense spending and full order books for its submarines and frigates. The boom in demand for TKMS's products is likely to make it attractive to investors after its independence.
Despite the government's decision, TKMS remains a prized asset of Thyssenkrupp, and the IPO of TKMS is a potential event. However, the details are still uncertain due to the government's decision to refrain from a stake at this time. The supervisory board recently passed a resolution for TKMS to go public independently, and shareholders will decide on this at an extraordinary general meeting on August 8.
Recently, Thyssenkrupp's stock has seen little overall movement, but the IPO of TKMS could potentially boost its share price. The marine division TKMS is intriguing due to the government backing away from a potential stake, and the state's lack of interest may not affect the company's attractiveness to investors.
In conclusion, the German government's strategic choice to avoid becoming a shareholder in TKMS reflects a commitment to maintaining influence and oversight through agreements and regulatory controls without direct investment. This decision could pave the way for a successful IPO for TKMS and potentially boost Thyssenkrupp's share price.
The German government's decision not to invest in Thyssenkrupp's marine division, TKMS, indicates a focus on maintaining influence and oversight through agreements, without the need for direct investment in the industry. This choice could create a substantial opportunity for finance, as the planned IPO for TKMS may attract business investment and potentially boost Thyssenkrupp's share price.
