Largest German shipbuilder, TKMS, achieves autonomy
German Naval Vessel Builder TKMS Goes Public: Key Details of the Supervisory Board and Upcoming IPO
Germany's naval vessel shipbuilder TKMS, renowned for being the world leader in conventionally powered submarines and builder of frigates and corvettes, is making a significant move towards independence. The company, set to be named TKMS AG & Co. KGaA after the spin-off, has received shareholder approval for its division from Thyssenkrupp and is preparing for a public listing on the Frankfurt Stock Exchange Prime Standard segment in 2025.
The supervisory board of TKMS AG & Co. KGaA, following its spin-off from Thyssenkrupp and ahead of its planned IPO, consists of 10 members, including 4 independent representatives. All members are elected by the General Meeting of TKMS AG & Co. KGaA. Additionally, the general partner, TKMS Management AG, will have its own supervisory board comprising 6 members, largely overlapping with the main Supervisory Board to ensure coordinated oversight and efficient committee work.
It's important to note that these supervisory boards are not subject to employee co-determination; employee participation remains through existing committee structures at TKMS GmbH and Thyssenkrupp AG. Thyssenkrupp retains a majority 51% stake after spinning off 49% to shareholders.
TKMS' order backlog stands at over €18 billion, with recent successes including securing submarine orders from Singapore for the Indo-Pacific region and being awarded the contract to build the new German research vessel "Polarstern 2" for extreme climate and weather conditions, with a contract volume of around €1.2 billion.
The attractiveness for investors increases due to clearly defined business models, avoiding the disadvantages of a conglomerate. With the spin-off, TKMS will have direct access to the capital market and can drive investments in new technologies and markets independently. This is expected to lead to better corporate management and decisions, as well as greater entrepreneurial freedom to grow.
Criticisms have been raised regarding the planned management structure with a supervisory board predominantly filled by the parent company. Hendrik Schmidt of DWS, for instance, has demanded a predominantly independent supervisory body to safeguard the interests of minority shareholders. However, the federal government has agreed with Thyssenkrupp on approval and pre-emption rights, and has the right to propose a member for the new TKMS supervisory board.
The largest individual shareholder of Thyssenkrupp AG, the Krupp Foundation with a 21 percent stake, is to get a seat on the TKMS supervisory board. The IPO of TKMS is expected to be carried out immediately after its entry into the commercial register, which is scheduled for mid-October. The remaining 49% of TKMS shares will be transferred to Thyssenkrupp shareholders in proportion to their stake. Oliver Burkhard, the former Thyssenkrupp labor director, is the CEO of TKMS.
As part of a planned corporate restructuring at Thyssenkrupp, the independence of TKMS is just one of the four divisions being set up independently and opened up for third-party participation. This move is expected to make the company's value visible externally. TKMS employs around 8,300 people and has shipyard locations in Kiel, Wismar, and Itajaí, Brazil, among others.
References: 1. TKMS AG & Co. KGaA Supervisory Board 2. TKMS AG & Co. KGaA Supervisory Board Composition 3. TKMS AG & Co. KGaA Management Supervisory Board 4. TKMS AG & Co. KGaA IPO 5. Thyssenkrupp's Corporate Restructuring
More industry players may find the finance sector attractive if they observe TKMS' success in going public, as the company's independence and access to capital market investments could drive innovation and growth in the aerospace sector. The diverse composition of TKMS AG & Co. KGaA's supervisory board, with a mix of Thyssenkrupp, independent, and government representatives, presents an unique management structure that could potentially address criticisms regarding minority shareholders' interests.
