First steps taken toward naval merger

ThyssenKrupp and One Equity Partners have recently agreed to merge ThyssenKrupp Werften and Howaldtswerke-Deutsche Werft, creating a shipyard group with a sales of around 2.2 billion Euros.

ThyssenKrupp and One Equity Partners (OEP) recently signed a non-binding declaration of intent to merge ThyssenKrupp Werften and Howaldtswerke-Deutsche Werft (HDW). The new group will be managed by ThyssenKrupp Werften.

OEP will transfer all its shares in HDW to ThyssenKrupp Werften. A company group, including Blohm + Voss and Blohm + Voss Repair, Hamburg; Nordseewerke, Emden, Howaldtswerke-Deutsche Werft, Kiel, Kockums, Sweden; and Hellenic Shipyards Company, Greece, will be created under a new name. The new shipyard group represents a sales volume of around 2.2 billion Euros and will employ approximately 9,300 staff.

According to the declaration of intent, OEP will receive 25% of the shares in the shipyard group and 240 million Euros in cash in exchange for 100% of the shares in HDW. 170 million Euros of this will be financed from cash funds of the current ThyssenKrupp Werften group. ThyssenKrupp Technologies will pay an additional 70 million Euros to gain a 75% stake and the right to full industrial management of the new shipyard group.

The shipyards involved are said to be leaders in the construction of conventional submarines and modern surface naval vessels. According to ThyssenKrupp, the merger will create a systems house with strong positions in naval shipbuilding. In addition, the company group will also remain active in the merchant sector.

Subject to approval by the relevant supervisory bodies of both partners and the responsible authorities, consummation of the merger is planned for autumn 2004.

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