FRANKFURT (Reuters) – A top-20 investor of Thyssenkrupp on Friday called for a fast disposal of the German industrial group’s warship and submarine division, saying the risks associated with the business outweighed potential benefits.
“We demand the immediate sale of all defense activities. The reputational and compliance risk of this business segment stands in no relation to the profit generated by the division,” said Ingo Speich, head of sustainability and corporate governance at Deka Investment.
According to Refinitiv Eikon data, Deka holds 0.45% of Thyssenkrupp shares, making it the company’s 12th-biggest shareholder.
Thyssenkrupp is weighing what it calls a standalone solution for its defense division, Thyssenkrupp Marine Systems (TKMS), which potentially covers partnerships, joint ventures or any other form of consolidation.
The group has been in favour of a consolidation of the European defense sector, which could gain momentum through Germany’s decision to beef up its armed forces via a 100 billion-euro special budget.
“Even a partial sale would be a step in the right direction,” Speich said in a speech embargoed for the start of Thyssenkrupp’s annual general meeting.
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. It employs around 6,900 staff.
(Reporting by Christoph Steitz in Frankfurt; Editing by Matthew Lewis)
