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March 11 2002

Bank One offshoot gains control of HDW
One Equity Partners, a unit of Chicago-based Bank One Corporation, has gained control of German shipbuilder HDW, the world's leading builder of non-nuclear submarines.

One Equity gained control when Babcock-Borsig, which had owned 50% of HDW sold 25% to the Bank One unit. Preussag AG then announced that, together with a financial investor, it was selling One Equity the remaining 50% chunk of HDW—less one share.

Nobody's talking money, but HDW is generally belived to be worth around $700 million and its orderbook is worth around $5 billion.

In the middle of all this is Klaus Lederer, chairman of both Babcock Borisg and HDW. For some time he's reportedly been trying to work a deal with American investor Guy Wyser-Pratte who took a 5% stake in Babcock earlier this year. The aim was to concentrate Babcock's activities on HDW, but apparently the other owners of HDW weren't ready to go along with this plan.

Now Lederer is staying on as chairman of HDW but will be stepping down from Babcock Borsig.

The One Equity deal seems to clear the way for an eventual consolidation in German shipbuilding. Immediately on gaining control of HDW, One Equity offered ThyssenKrupp and MAN 15% of HDW each, the right to buy its remaining shares in two years and a subsequent veto over control of the yard.

HDW Group members include Swedish submarine builder Kockums. A joint venture of HDW and MAN's Ferrostaal owns Greece's Hellenic Shipyards.

Ferrostaal is the commercial partner of the German Naval group whose other members are HDW, and ThyssenKrupp's Blohm + Voss GmbH and Thyssen Nordsee Werke GmbH operations