Thyssenkrupp investors approve defence spin-off
Thyssenkrupp shareholders on Friday approved a planned spin-off of its defence division, the conglomerate's latest restructuring move, aimed at fully capturing the value of the division amid rising military spending in Europe.
The order book of Thyssenkrupp's TKMS division - which makes submarines, frigates and develops mine-sweeping technologies - has swollen to more than €18 billion ($21 billion) from €11.7 billion at the end of September last year.
That has in turn boosted shares of its parent, which have more than doubled year-to-date, while more ambitious defence spending plans have also benefited European defence peers more broadly.
Thyssenkrupp plans to spin off 49 per cent of TKMS to its existing shareholders while keeping the remaining stake.
The Alfried Krupp von Bohlen and Halbach foundation, Thyssenkrupp's largest shareholder with a 21 per cent stake, welcomed the vote, saying the spin-off of TKMS opened up new business opportunities, without elaborating.
Thyssenkrupp said on Friday it expected the spin-off and separate listing of TKMS to be formalised in mid-October.
Shares in the company traded three per cent higher at 13:13 GMT following the vote.
Last month, Berlin reached a preliminary agreement with Thyssenkrupp that guarantees the government will retain influence at TKMS, as it seeks to keep a certain level of control over strategic defence assets.
Labour unions have called for Berlin to take a blocking minority in TKMS to ensure stakes in the business do not fall into the wrong hands, but the government has so far not done so.
Stephanie Schmoliner of labour union IG Metall, who also serves as deputy chairman of TKMS's supervisory board, repeated these demands on Friday, saying a government stake was "essential".
The increase in defence spending comes in response to Russia's invasion of Ukraine, and as US President Donald Trump has called on NATO's European members to raise their military budgets.
(Reporting by Christoph Steitz and Tom Kaeckenhoff. Editing by Elaine Hardcastle and Mark Potter)
