All-change for German shipbuilding

Germany’s shipbuilding sector is facing a major restructuring in the wake of plans proposed by the ThyssenKrupp group to merge its shipyard business with that of US company One Equity Partners (OEP).

A new group consisting of shipyards in Germany, Sweden and Greece would emerge with a combined turnover of $2.6 billion and 9,300 employees. ThyssenKrupp and OEP, majority owner of the major naval shipyard Howaldtswerke-Deutsche Werft (HDW) in Kiel, signed a letter of intent to combine their shipbuilding operations. Both sides hope to have the deal ready for signing by July, with the merger then subject to approval by cartel authorities.

Besides HDW, in which OEP gained a 75% stake in 2002, the shipyards which will make up the new group would include Blohm+Voss in Hamburg, Nordseewerke in Emden, as well as the Swedish shipbuilder Kockums and Hellenic Shipyards in Greece. Indications are that job reductions would likely result from the merger.

The plans come amid problems facing the German shipbuilding sector, particularly the tough pricing competition posed by Far Eastern shipyards, and by tonnage limits set under European Union rules.