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20 Mar 2024

Carlyle Nears Advanced Talks on '1.5 Billion Thyssen Unit: Bloomberg

Carlyle Nears Advanced Talks on '1.5 Billion Thyssen Unit: Bloomberg
Source: Thyssenkrupp Marine Systems
Originally posted on Bloomberg - By Eyk Henning, Michael Nienaber, and Kamil Kowalcze
  • US firm is seeking majority holding in shipbuilding unit
  • Thyssenkrupp also may sell stake in unit to German government

Private equity firm Carlyle Group Inc. is preparing to enter advanced negotiations to acquire a majority stake in Thyssenkrupp AG’s naval shipbuilding unit in a deal that could value the business at about €1.5 billion ($1.6 billion) including debt, people familiar with the matter said.

Talks are progressing and the beleaguered German conglomerate could announce as soon as this week that it’s entering advanced discussions with Carlyle on terms of a deal, the people said, asking not to be identified because the information is private.

Shares of Thyssenkrupp rose 3.6% to €4.82 at 12:57 p.m. Monday in Frankfurt, touching a session high after Bloomberg News reported on the process.

Thyssenkrupp’s Marine Systems business makes submarines, surface vessels and naval electronics. Selling a stake in the naval unit would mark a welcome bright spot for Thyssenkrupp Chief Executive Officer Miguel Ángel López Borrego, who’s pledged to revive the struggling conglomerate but faced a series of recent setbacks.

Separately, Thyssenkrupp is in talks to sell about a 25% stake in the naval unit to the German government, the people said. The backing of Germany’s federal government is seen as important to help the marine systems business win contracts and secure financing.

State development bank KfW has prepared an internal report on the feasibility of such a move, which is now being studied by German Chancellor Olaf Scholz’s ruling coalition ahead of a final decision, the people said. The government is leaning toward investing in the marine systems business, in part because submarine construction touches on areas of national security, according to the people.

Deliberations are ongoing, and terms of the deal could change. Representatives for Carlyle, the German economy ministry and KfW declined to comment.

“We are currently looking into various capital market options for the planned separation of the marine division,” Thyssenkrupp said in an emailed statement. “At the same time, talks are being held with the German government regarding a possible state investment. We are currently unable to comment on the details of the various options.”

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