The new German government has no plans currently to take a stake in Thyssenkrupp’s defence division TKMS, the business daily Handelsblatt reported on Wednesday, citing government sources.
According to the report, the chancellery as well as the ministries involved have agreed not to push for state involvement at this time, something Thyssenkrupp’s labour leaders have called for.
A spokesperson for Thyssenkrupp said the company was engaged in constructive discussions with the government, “but we do not wish to pre-empt the outcome of these discussions”.
Thyssenkrupp has said in the past that government participation was no precondition for any divestment of TKMS and that a planned spin-off of the business – expected to take place by the end of the year – would go ahead regardless.
Chairman Siegfried Russwurm said last month that talks about the government participating to safeguard Germany’s national interest were unnecessary given that Berlin is either a customer or must approve equipment sales to other countries.
Germany’s economy and defence ministries did not immediately respond to emailed requests for comment.
The government will instead seek a “security agreement” to ensure that national defence and jobs are not at risk from the spin-off, which would involve regular consultations, Handelsblatt reported.
The agreement would also include a right of first refusal for the government if a strategic investor wanted to buy into TKMS, though that is not expected, the paper said.
Thyssenkrupp shareholders will vote on the plan to spin off a 49% stake in TKMS at an extraordinary general meeting on August 8.
TKMS, which makes submarines and frigates as well as sensor and mine-hunting technology, has been benefiting from a broader surge in defence stocks, boosted by higher military spending in Europe amid fears of dwindling U.S. support.
(Reporting by Anneli Palmen and Tom Kaeckenhoff)
