FRANKFURT/DUESSELDORF -A top-20 Thyssenkrupp shareholder called on Friday for the rapid disposal of the German group’s warship and submarine business, saying its risks outweighed any potential benefits.
Thyssenkrupp is considering what it calls a standalone solution for Thyssenkrupp Marine Systems (TKMS), including partnerships, joint ventures or other forms of consolidation.
“We demand the immediate sale of all defence activities. The reputational and compliance risk of this business segment stands in no relation to the profit generated by the division,” Ingo Speich, head of sustainability and corporate governance at Deka Investment, said.
Deka holds 0.45% of Thyssenkrupp shares, according to Refinitiv Eikon data, making it the German industrial conglomerate’s 12th-biggest investor.
Speich did not elaborate on what the reputational and compliance risks could be.
Thyssenkrupp Chief Executive Martina Merz played down the need for swift action at the group’s annual general meeting, saying TKMS, which has around 6,900 staff, was in a strong position.
“We will not be driven to second-best solutions,” Merz said.
“At the same time, we are in talks with the Federal Government, as one of our most important customers, to find out if and when the political conditions for a standalone solution can be created,” she added.
Thyssenkrupp has said it is in favour of a consolidation of the European defence sector, which could gain momentum through Germany’s decision to beef up its armed forces via a 100 billion-euro ($109 billion) special budget.
“Even a partial sale would be a step in the right direction,” Speich told Friday’s AGM.
TKMS posted sales of 1.8 billion euros in the last fiscal year that ended in September, while adjusted operating profit was 32 million euros.
($1 = 0.9153 euros)