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Industrials

Supporting the evolution of a European naval defence powerhouse

Macquarie Capital acted as financial adviser to thyssenkrupp AG on the spin-off of TKMS, a leading global supplier of submarines, naval surface vessels and maritime electronics

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SectorIndustrials
Sub-sectorDefence
LocationEurope

Opportunity

Europe’s defence sector is undergoing an evolution that has resulted in a significant spending increase across NATO countries.1

Rising geopolitical tensions, adjustments of transnational priorities and the rise of security threats are prompting a proactive surge in Europe’s defence efforts;2 this seen in the European Union spending €343 billion on defence in 2024 – an increase from €251 billion in 2021.3 This spend increase contributed to European defence companies’ turnover rising to 13.8 per cent year-on-year to €183.4 billion in 2024.3

TKMS (formerly thyssenkrupp Marine Systems) is a global leader in the production of maritime defence technologies, specialising in the provision of submarines and naval systems for the last 185 years.4 Amidst the accelerating European defence landscape, TKMS aims for entrepreneurial independence and direct access to capital markets to support its growth; facilitating targeted partnerships and acquisitions via enhanced flexibility and a strengthened role in Europe’s defence ecosystem.

Approach

Macquarie Capital advised on the successful spin-off of TKMS from thyssenkrupp AG (thyssenkrupp), enabling the company to optimise its position in the European defence market while safeguarding thyssenkrupp’s strategic interests.

Macquarie implemented a dual-track process to evaluate trade-sale alternatives alongside public market options for the strategic spin-off of TKMS. This methodology enabled thyssenkrupp to assess multiple opportunities and select the most attractive exit solution for the company.

Unlike conventional divestitures, the listing was structured as a KGaA (partnership limited by shares) – a German hybrid legal format that combines elements of a partnership (KG) with a stock corporation (AG).5 This ownership structure was designed to ensure sustained, long-term governance and strategic control by thyssenkrupp, independent of the precise equity stake; provided that the minimum thresholds for General Partner control are maintained.6

The spin-off was successfully completed in October 2025 when TKMS debuted on the Frankfurt Stock Exchange Prime Standard. As part of the transaction, 49 per cent of TKMS shares were allocated to existing thyssenkrupp shareholders (at a ratio of 1:20), with the company itself retaining a controlling 51 per cent stake to preserve its tactical influence.7

Outcome

The investor response was highly positive as TKMS shares surged by 35 per cent8 and market capitalisation reached c.€5.2 billion on the first day of trading.9

This signalled strong confidence in the company’s growth prospects and the resilience of the European defence sector. It also unlocked significant shareholder value, and positioned TKMS for accelerated market leadership as an independent entity.

The transaction underscored Macquarie Capital’s capability in managing highly complex dual-track processes. Acting as a trusted adviser, we guided thyssenkrupp through a comprehensive assessment of alternative strategic options, including various potential trade sale opportunities to financial sponsors, before confirming that the spin-off was the optimal solution.

The independence of TKMS was a core element of thyssenkrupp’s strategic realignment – transforming from a diversified industrial conglomerate into a focused, strategically managed holding company.

The successful execution reinforces Macquarie Capital’s strong advisory track record in Germany while highlighting our expanding presence in Europe’s defence sector. It also builds on our international capability of delivering deep sector expertise for our clients, driving newfound opportunities through bespoke insights and advice on a global scale.

Trading Line Chart Up, chart, graph, line, data, statistics, trends, analysis, performance, metrics, upward, increase

+35 per cent

share price increase on first day of trading, rising from €60 to €81

Coin set, Currency coin stack, Gold coins, Coin Pile, Stacked Money, Currency Stack, Money Stack, Wealth Stack, Monetary Stack, Dollar coin collection

c.€5.2b

market capitalisation at the end of first trading day

Money in Hand, Cash Payment, Financial Assistance, Payment Handover, Cash Handoff, Monetary Exchange, Donate, Save Money, Invest Finance, Payment, Money Exchange

29x - 44x

implied Enterprise Value (EV)/EBIT FY24/25E valuation range10

  1. ‘Defence expenditures and NATO’s 5% commitment’, NATO, December 2025
  2. ‘Europe’s defence industry at a turning point’, Consultancy.eu, November 2025
  3. ‘European defence sector turnover surge’, euro.news, December 2025
  4.  ‘Marine Systems – TKMS: Your Maritime Powerhouse’, thyssenkrupp, accessed 16 January 2026
  5. ‘TKMS – Your Maritime Powerhouse – Capital Markets Day’, TKMS, 30 September 2025, accessed 16 January 2026
  6. At least 30% of the equity stake is required to retain control over the general partner
  7. ‘Extraordinary General Meeting of thyssenkrupp AG approves spin-off of TKMS’, thyssenkrupp, 8 August 2025
  8. ‘Bernstein starts TKMS at Underperform, cites stretched valuation post-spinoff’, Investing.com, 21 October 2025
  9. ‘Warship builder TKMS rides defence boom to blowout stock market debut’, Reuters, 20 October 2025
  10. Based on management guidance of adjusted EBIT FY24/25E of €100-150 million, €5.2 billion market capitalisation and €745 million net financial position (net cash).

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