Report: TKMS Seeks More Capacity by Acquiring German Naval Yards Kiel
A month after completing a spin-off to become an independent publicly traded company, Germany’s naval shipbuilder TKMS is reported to be pursuing the acquisition of German Naval Yard Kiel, both for expansion and consolidation in naval shipbuilding. The German news outlet Kieler Nachrichten reports that advanced negotiations are nearly complete for the acquisition from the French group CMN Naval to combine the two Kiel-based shipbuilders and expand TKMS’s product reach.
Management of German conglomerate Thyssenkrupp and TKMS had said the spin-off of the shipbuilder was designed to position it for growth. They suggested as an independent company, TKMS could further pursue consolidation in the industry.
Analysts point out that the combination of TKMS and German Naval Yards would be well-suited. TKMS builds submarines in Kiel, adjacent to German Naval Yard’s facilities, which focus on large and technically complex surface naval ships such as corvettes, frigates, and OPVs, as well as a repair and maintenance business and building luxury yachts.
German Naval Yards has been in operation since 1838 as Howaldtswerke and later Howaldtswerke – Deutsche Werft Aktiengesellschaft (HDW) after a 1967 consolidation in the industry. The company took its present form in 2005 as the group split into surface shipbuilding, separate from the submarine operations, which became TKMS. The German Shipyards Group was launched in 2009 and consolidated with the surface shipbuilding operations in 2011.
It continues to build frigates for the German Navy as well as maintenance operations. The company, in addition, the news report points out, has leased space and personnel to TKMS. It has also collaborated with NVL (Naval Vessels Lürssen) on projects.
TKMS has been actively seeking additional capacity. In 2022, it acquired the facilities in Wismar from the bankrupt MV Werften. It leased the building hall for the completion of the cruise ship, which became Disney Adventure, and since the cruise ship departed the yard earlier this year has the full operations in Wismar.
The move comes as Germany, along with other nations, is expected to dramatically increase spending to expand naval capacity. As a leader in submarines and vessels such as corvettes, TKMS is also competing for large international contracts, including from Canada and Poland.
The naval shipbuilding industry is consolidating ahead of the anticipated surge in orders. Earlier this year, the Lürssen Group agreed to sell NVL to German defense contractor Rheinmetall. Lürssen, like German Naval Group, builds and repairs surface vessels and separated its business a few years ago to put its yacht construction into a separate business. Lürssen plans to continue its yacht business after the sale of the naval shipbuilder.
Fincantieri to Expand Ancona Shipyard for Naval Shipbuilding
Fincantieri has completed the last of a series of agreements with the Central Adriatic Sea Port Authority for the expansion of the shipbuilding yard in Ancona, Italy. The Italian shipbuilder reports that the agreements confirm the joint commitment to enhancing the strategic role of the port and the shipyard, strengthening their contribution to the economic development of the region and the Italian naval sector.
One of the most historic sites within the group, shipbuilding at Ancona traces back to 1843. Today, as one of the smaller yards in the group, it specializes in cruise ships and luxury yachts. The yard is being used as the site for the construction of the luxury cruise ships for companies including Viking, which has built a dozen cruise ships and has 10 additional vessels on order, as well as for Regent Seven Seas, Silversea, and currently Four Seasons.
“The signing of the concession represents a fundamental step for the future of the Ancona shipyard and for the entire Italian naval industry,” said Pierroberto Folgiero, CEO and General Manager of Fincantieri. “With our development plan, we intend to transform the shipyard into a center of excellence, where tradition and technology come together to generate value for the region and the entire industrial chain.”
The concession gives Fincantieri the use of over 314,000 square meters of land, water, and facilities, which is a significant portion of the Port of Ancona. Fincantieri has rights to use the port and its facilities until the end of 2064, and according to the company will permit it to conduct and expand its shipbuilding activities.
Fincantieri has committed to investing €40 million for a major modernization and development of the capabilities for the Ancona shipyard. With the expansion of the yard, Fincantieri says it will make it increasingly competitive in the construction of large naval vessels. Ancona has not built naval vessels since the 1980s, but the company looks to expand its capabilities to realize the expected increase in naval shipbuilding as countries in Europe and elsewhere seek to increase their capacities. Fincantieri has been expanding its naval shipbuilding capabilities as it seeks to grow and diversify its business.
The new agreement is the latest in a series of steps that started in 2017 to enhance the Ancona shipyard. Two years ago, the Port System Authority of the Central Adriatic Sea agreed to a €40 million publicly funded investment into the port’s facilities. Half of the investment was for the construction of a new pier for the shipyard, and the other half was for the extension of the dry dock and securing the breakwater.
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