August 12, 2004

ThyssenKrupp gets set for shipyard shake-up

A major restructuring is on the way for German shipbuilding. ThyssenKrupp has now completed its plans to bring together the ThyssenKrupp Werften and Howaldtswerke-Deutsche Werft yards as what it calls a "ein Systemshaus" (a systems house) with strong positions in the naval shipbuilding sector.

On May 16, 2004 ThyssenKrupp and One Equity Partners (OEP) signed a non-binding letter of intent to combine ThyssenKrupp Werften and Howaldtswerke-Deutsche Werft (HDW) in a new group under the control of ThyssenKrupp Werften GmbH. The reciprocal due diligence reviews have now been successfully completed and the basic outlines of the new structure are in place:

"Under the new structure all existing locations will be retained," says Dr. Olaf Berlien, Chairman of the Executive Board of ThyssenKrupp Technologies AG. Based on the existing key activities of the individual shipyards, the new group will concentrate on four product areas: submarines, naval ships, civilian ships and repairs.

The Hamburg (Blohm + Voss), Emden (Nordseewerke) and Kiel (HDW) facilities will each be developed into centers of excellence with a clearly defined product responsibility. This will safeguard the locations long-term and create a balanced development perspective.

The Hamburg location will concentrate on naval surface ships and mega yachts as well as the repair business. Emden will be the location for naval and merchant surface ships, while submarine activities will be concentrated in Kiel.

Talks are currently being conducted with the employee bodies. A personnel capacity plan based on the product allocation is being prepared.

ThyssenKrupp says "the new structure offers decisive advantages for project management compared with the current common practice of work sharing for submarines and naval ships. In addition, the concentration of each activity at one main location will reduce logistics expense in the future."

The merger agreements are to be signed by the end of September and the merger is expected to be completed by the end of December.

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