By Christoph Steitz
FRANKFURT (Reuters) -Warship builder TKMS rode a global defence boom to trade at 81 euros per share in its blockbuster stock market debut on Monday, giving it a valuation of more than 5 billion euros ($5.8 billion), around double expectations.
The listing is the latest move by German parent conglomerate Thyssenkrupp to simplify its structure and take advantage of growing demand for defence assets.
Thyssenkrupp will keep a 51% stake in TKMS, as its shares began trading on Frankfurt’s stock exchange following the spin-off, with the rest being distributed to its investors.
Shares in Thyssenkrupp were down 20.7% at 0928 GMT, reflecting the transfer of the stake in the naval vessel business. But they were up 10.2% when adjusting Friday’s closing price downwards to retroactively account for the transaction.
Headquartered in the northern German port city of Kiel on the Baltic Sea, TKMS, which traces its roots back 187 years, is the world’s largest builder of non-nuclear submarines and frigates. Its Atlas Electronics division also produces underwater technology, including mine-sweeping systems.
Analysts had expected the spin-off could value the company at 2.3 billion euros to 2.7 billion euros.
DEFENCE SPENDING BOUNCING BACK AFTER POST-COLD WAR LULL
Demand for defence equipment has soared in the wake of Russia’s full-scale invasion of Ukraine in 2022 and subsequent U.S. pressure on Europe to bolster its military capacity.
TKMS’s order book backlog has tripled in the past five years, reaching 18.6 billion euros in June 2025, as defence spending has surged back following a post-Cold War lull.
“We need more flexibility … in light of rising geopolitical tensions,” TKMS CEO Oliver Burkhard said just before shares began trading.
In a reflection of soaring investor appetite for pure plays in the defence sector, the spin-off also coincides with deliberations by Franco-German defence supplier KNDS over an initial public offering in the coming months.
TKMS, which employs more than 9,100 staff globally, last month held its first capital markets day, releasing margin targets that some investors said were not ambitious enough when compared with rivals like Britain’s BAE, Germany’s NVL and France’s Naval Group.
The business that would later become TKMS began making steam engines and railroad cars in the early 1800s. Later iterations of the company made Germany’s first submarine, the so-called Brandtaucher, as the country sought to better compete with Denmark’s navy.
Commerzbank, Citi and Deutsche Bank acted as financial advisers on Monday’s listing.
Speaking at the debut in Frankfurt, Thyssenkrupp CEO Miguel Lopez told Reuters the company was in intensive discussions with India’s Jindal Steel International over the sale of Thyssenkrupp’s steel division.
“We’ll see what outcome we’ll have over the next few months,” he said.
($1 = 0.8575 euros)
(Reporting by Christoph Steitz, Paolo Laudani, Ludwig Burger; Writing by Christoph Steitz and Matthias Williams; Editing by Emelia Sithole-Matarise, Thomas Derpinghaus and Joe Bavier)
