German yards agree new naval shipbuilding alliance

German naval shipbuilders Lürssen Werft and German Naval Yards have agreed a new shipbuilding alliance for naval vessels, while ThyssenKrupp Marine Systems (TKMS) and Italian yard Fincantieri are also considering cooperation.

Bremen-based Lürssen Werft and German Naval Yards in Kiel said they have agreed to merge their naval shipbuilding activities and will in future jointly build naval vessels and ships in government contracts. A new joint venture company will be formed for this sector under the leadership of the Lürssen group. The cooperation aims to increase international competitiveness.

Separately, German group ThyssenKrupp is exploring several strategic options for its shipyard subsidiary TKMS, ranging from merging it with Italy's Fincantieri or cooperation with other yards. ThyssenKrupp is holding talks aimed at creating economies of scale for TKMS. As part of the deliberations, ThyssenKrupp is in talks with Fincantieri about a 50:50 joint venture to create a European champion shipbuilder with combined sales of 3.4 billion euros. Under that scenario Fincantieri, which also builds cruise ships and is majority-owned by the Italian government, would bring in its naval shipbuilding activities, which the source said accounted for 1.6 billion euros of sales last year.