Two German yards combine their naval activities

Image: German Naval Yards Kiel

In a step towards consolidation of naval shipbuilding in northern Germany, Bremen-based Lürssen Group and German Naval Yards Kiel plan to combine their existing military and naval surface shipbuilding activities into a joint company that will be led by Lürssen Group. The objective of the combination is to improve the structure of the German shipbuilding industry and to bolster its efficiency and sustainability.

German Naval Yards says that “the two shareholding families” have successfully laid the foundation for a definitive contractual agreement for the joint company.”

Those two families are the Safa family, whose Privinvest Holding is the ultimate owner of German Naval Yards, and the Lürssen family.

The proposed combination remains subject to approval by the relevant merger control authorities.

According to German Naval Yards the combination addresses the German government’s request to establish industrial structures that guarantee reliable domestic availability and an efficient cost structure. In addition to the construction of highly innovative and technologically advanced naval vessels, this also includes the functional integrity of such vessels over the entire life cycle. The strengthening of the domestic naval shipbuilding industry through a combined entity between Lürssen and German Naval Yards Kiel meets these objectives and strengthens the ability of northern German shipyards and the German domestic maritime supply industry to successfully compete on a global scale.

The German Government, represented by Maritime Coordinator Norbert Brackmann, was involved in the process from early stages on.

Iskandar Safa, CEO of Privinvest Holding SAL, commented: “The consolidation in Germany is long overdue. Germany has first-class naval yards and excellent technologies. However, our customers require partners with sufficient scale and capabilities to fulfill large-scale orders of strategic importance. Our customers can be better served if domestic players join forces. We have made an important step into the right direction today. We look forward to working with our partner Lürssen.”

Friedrich Lürssen, of the Lürssen Group, commented. “We are convinced that the consolidation of our naval shipyards has significant strategic merit and will strengthen their competitiveness in the future. We are pursuing this step with the objective to provide a more comprehensive and efficient offering for the supply and maintenance of high-quality naval units to the national customer. We stand ready for this with our team of motivated and highly qualified employees. With this strategic project, we also want to actively contribute to mitigating the effects of the current corona pandemic and to safeguard the national industry’s jobs and technological capabilities in the long-term. We look forward to working with our new partner and are confident to take the required next steps to successfully implement our consolidation strategy.”

Broadcaster NDR notes that the Lürssen Group also includes Blohm + Voss in Hamburg and the Peene shipyard in Wolgast.