TKMS, Germany's biggest shipbuilder, secures autonomous operations
Germany's Naval Shipbuilder TKMS Goes Public
Thyssenkrupp's naval shipbuilding division, TKMS, is set to begin trading on the Frankfurt Stock Exchange in mid-October 2025. The initial public offering (IPO) comes after shareholders approved the spin-off from Thyssenkrupp, and will see 49% of TKMS shares become tradable.
Thyssenkrupp plans to retain a majority stake of 51%, but will secure controlling influence even if its stake decreases to 30%. The federal government will have approval and pre-emption rights, and the right to propose a member for the TKMS supervisory board.
Under a security agreement between TKMS and the German federal government, expected to be finalized by the end of September 2025, the federal government will appoint a member to the ten-member supervisory board. This ensures direct oversight in the company's defense-related activities.
The federal government's involvement reflects the strategic importance of TKMS's warship business, including naval electronic systems, surface vessels, and submarines, in Germany's national security. This involvement aligns with Germany's recent defense budget expansion and strategic focus on military capabilities.
TKMS, the world leader in conventionally powered submarines, has full order books and numerous submarine orders from Germany, Norway, Israel, and Singapore. The company is also responsible for building frigates and corvettes.
The spin-off is intended to give TKMS greater entrepreneurial freedom, and is part of Thyssenkrupp's planned corporate restructuring for the coming years. TKMS employs around 8,300 people and has shipyard locations in Kiel, Wismar, Itajaí, Brazil, Hamburg, Bremen, and Emden.
The order backlog of TKMS has grown by more than 50% since the end of September to over 18 billion euros. Singapore has ordered two more submarines from TKMS for the Indo-Pacific region.
Despite the federal government's involvement, the acquisition of shares in TKMS is not part of the current plan, but the company is open to further dialogue. Hendrik Schmidt of DWS fund company criticized the planned management structure, stating that the supervisory board, predominantly staffed by the parent company, may limit the independence of TKMS. However, Schmidt called for the supervisory body to be predominantly independently staffed to protect the interests of minority shareholders.
The CEO of TKMS is Oliver Burkhard. The company recently won the contract to construct the new German research ship 'Polarstern 2' for extreme climate and weather conditions, with an order volume of around 1.2 billion euros.
In summary, the IPO of TKMS aims to balance market growth with national security imperatives in Germany's evolving defense sector. The federal government's involvement will ensure oversight on strategic defense operations, while enabling the company to benefit from capital market investments.
| Aspect | Details | |--------|---------| | IPO Trading Start | Mid-October 2025 | | Share Distribution | 1 TKMS share per 20 Thyssenkrupp shares | | Shares Offered | 49% tradable, 51% retained by Thyssenkrupp | | Government Role | Security agreement by end of Sept 2025; 1 govt. member on 10-member supervisory board | | Governance | Federal government involvement ensures oversight on strategic defense operations |
The IPO of TKMS, scheduled for mid-October 2025, will see the closed industry of naval shipbuilding enter the finance sector and become a public business, with 49% of tradable shares available for purchase. Despite the government's involvement, the acquisition of additional shares is not currently planned, but open for further dialogue, recognizing the need to maintain a balance between market growth and national security interests in Germany's evolving defense sector.
