BERLIN/FRANKFURT (Reuters) -Berlin has reached a preliminary agreement with Thyssenkrupp to secure influence over the German conglomerate's defence division TKMS, ahead of a planned spin-off and
Berlin Gains Strategic Control Over Thyssenkrupp's TKMS Division
BERLIN/FRANKFURT (Reuters) -Berlin has reached a preliminary agreement with Thyssenkrupp to secure influence over the German conglomerate's defence division TKMS, ahead of a planned spin-off and separate listing later this year, company documents showed on Friday.
The German industrial group, buoyed by robust demand for defence technology, is set to spin off 49% of TKMS to shareholders in the autumn, pending approval at an extraordinary general meeting on August 8.
The German government has been aiming for a security agreement regarding TKMS, which makes frigates, submarines and underwater mine-sweeping technology, and a first term sheet on the matter was concluded on July 7, the documents show.
Under the terms, which are to be finalised in a legally binding accord by the end of September, Germany would have a right of approval if a stake of 25% or more were to be sold in TKMS following the spin-off.
In addition, Berlin would have a pre-emptive right if Thyssenkrupp - which will hold a 51% in TKMS after the spin-off - were to sell a stake of 5% or more to a third party.
The German government would also have the right to nominate one of TKMS's ten supervisory board members.
"In the planned spin-off of a minority stake in TKMS, Thyssenkrupp is pursuing an approach that combines economic independence with reliability in terms of security policy," Thyssenkrupp said.
The company said that while talks with the government were constructive, it did not wish to anticipate the results ahead of their conclusion.
(Reporting by Markus Wacket and Christoph Steitz; Editing by Louise Heavens)
