German defence group Rheinmetall has entered the race to buy shipyard German Naval Yards Kiel with a non-binding bid, a move that would deepen its push into naval defence and pits it against rival warship maker Thyssenkrupp Marine Systems (TKMS).
Rheinmetall disclosed the bid as it released its first-quarter results on Thursday but said it would not provide information regarding its size.
CEO Armin Papperger said Rheinmetall has already begun the due diligence process and expects results in the next few weeks, at which point it would be able to submit a binding offer.
TKMS, which had submitted a non-binding offer for GNYK in January, said it was also currently in negotiations.
GNYK is part of the family-owned CMN Naval Group, a French shipbuilder active in naval and yacht construction, and employs around 400 people directly.
CMN Naval Group did not respond to an emailed request for comment.
The bid underlines Rheinmetall's efforts to expand its naval footprint after its recent acquisition of German warship maker NVL, now reported under the Naval Systems division.
Rheinmetall has also submitted a bid to supply F126 frigates to Germany, said Papperger, adding that reports suggesting a total value of €12 billion ($14 billion) did not seem entirely incorrect.
"With the successful acquisition of Naval Systems, we have entered a new market segment where we are also generating profitable growth," he said.
"We have set ourselves very ambitious goals in this area."
Rheinmetall expects stronger growth in the second quarter, driven by large-volume orders in the naval and vehicles business.
On Monday, Rheinmetall said it missed analysts' first-quarter revenue expectations in a pre-release but confirmed it expected stronger sales growth for the year, citing an expected second-quarter upswing also in production at its Spanish site and a planned delivery to the German army.
Its shares were down 3.9 per cent by 13:14 GMT on Thursday.
It added on Thursday that its outlook was supported by the integration of the Naval Systems segment, which includes existing projects worth €5.5 billion.
(Reporting by Miranda Murray and Matthias Inverardi; Editing by Friederike Heine, Bernadette Baum and Emelia Sithole-Matarise)