Germany's prominent shipyard, TKMS, breaks free from affiliations
In a significant corporate restructuring, Thyssenkrupp's marine division, TKMS, is set to become an independent entity and go public. This move comes as part of Thyssenkrupp's larger plan to separate its five divisions, opening them up for third-party participation.
TKMS, the world leader in conventionally powered submarines and a builder of frigates and corvettes, has seen its order backlog grow by more than 50% since September, reaching over €18 billion. The division's independence is intended to provide it with greater entrepreneurial freedom.
The spin-off is expected to provide TKMS with direct access to the capital market, allowing for independent investments in new technologies and markets. TKMS AG & Co. KGaA is set to be entered into the commercial register in mid-October, with an IPO to follow immediately.
However, the composition of TKMS's supervisory board has raised concerns. The board consists of 10 members, with 6 appointed by Thyssenkrupp AG, which retains a 51% controlling stake in TKMS. This structure has led to concerns regarding the protection of minority shareholders' interests.
Financial experts and shareholder representatives have criticized the supervisory board's structure, noting that the dominance of parent-company-appointed members could limit the independence of the board and effectively make Thyssenkrupp a "shadow captain on the bridge." They argue that a supervisory board composed primarily of independent members would better safeguard minority shareholders.
Thyssenkrupp, on the other hand, aims to ensure strategic stability and control by retaining the majority of shares. The federal government will have approval and pre-emption rights, and the right to propose a member for the new TKMS supervisory board.
Despite these concerns, TKMS has secured numerous submarine orders from Germany, Norway, Israel, and Singapore since 2021. The company has also been awarded the construction of the new German research ship 'Polarstern 2' for missions under extreme climate and weather conditions, with an order volume of around €1.2 billion.
TKMS employs around 8,300 people with shipyard locations in Kiel, Wismar, Itajaí, Brazil, Hamburg, Bremen, and Emden. The attractiveness for investors increases due to the division's clearly defined business models, free from the disadvantages of a conglomerate.
However, the debate over the supervisory board composition continues, with some calling for greater independence to protect minority shareholder rights.
References
- Thyssenkrupp Marine Systems: TKMS spins off and goes public
- Thyssenkrupp Marine Systems: TKMS to be spun off and listed on the stock exchange
- Thyssenkrupp Marine Systems: Supervisory Board of TKMS AG & Co. KGaA
- Handelsblatt: Thyssenkrupp-Tochter TKMS geht an die Börse
The spin-off of TKMS, an independent entity in the marine industry, is anticipated to offer direct access to the finance market, enabling independent investments in new technologies and markets for the shipbuilding giant. However, the supervisory board's composition, primarily appointed by Thyssenkrupp, has raised concerns amongst financial experts and shareholder representatives, who argue for a board consisting of more independent members to better safeguard minority shareholder rights in this business venture.
