TKMS, the German warship manufacturer spun out from parent group Thyssenkrupp, plans to capitalize on the expected surge in Europe’s defense spending with “prudent, margin-oriented growth” following its debut on Frankfurt’s stock exchange on Monday.
The initial public offering (IPO) saw TKMS launch at around 60 euros ($70) per share, giving it a market value of approximately 3.8 billion euros ($4.4 billion). The offering drew strong demand from investors, highlighting confidence in the company’s future prospects. Industrial engineering giant Thyssenkrupp will retain a 51% stake in TKMS following the IPO.
Also known as Thyssenkrupp Marine Services, the company specializes in building both submarines and surface vessels, as well as developing electronics and software technology. TKMS CEO Oliver Burkhard described this technology as the “jewel in the chest box” of the company. This includes advanced sonar equipment and certain autonomous devices, which are critical in what Burkhard refers to as the “mighty domain” operations — the next big frontier in military warfare.
The capital raised through the IPO will enable TKMS to expand its capacity amid an anticipated ramp-up in demand for stronger defense capabilities, particularly in the naval sector across Europe, over the coming decades.
By comparison, the U.S. currently operates 71 submarines, Russia has an estimated 64, while Germany has just six and has recently ordered six more. Burkhard revealed that TKMS holds an order backlog worth 18.6 billion euros, which is expected to keep the company operating at full capacity through to 2040. He noted that building a single submarine typically takes between 5 and 15 years.
TKMS has doubled its production capacity in recent years and now operates two shipyards capable of building state-of-the-art submarines that can remain submerged for weeks at a time. “With that capacity, we can naturally fulfill our existing orders and also take on new ones,” Burkhard stated, underscoring the company’s goal of “prudent, margin-oriented growth.”
In addition, TKMS benefits from a robust supply chain, with about 90% of its suppliers based in Europe, primarily in Germany, further strengthening its operational stability.
Following the IPO, Thyssenkrupp’s shares were trading 6.4% higher. The broader market also saw gains, with the Stoxx Europe Aerospace and Defense index rising about 2.7%. Notable performers included battle tank parts maker Renk, up 6.5%, defense technology firm Hensoldt, rising 7.9%, and Rheinmetall, gaining 5.8%.
Gareth McCartney, global co-head of equity capital markets at UBS, commented on TKMS’s market debut, saying that it arrives at a time when investors have significant liquidity and a strong appetite for IPOs in the region. “We now have a catalyst over the last few months with both defense and infrastructure spending very much at the core of what international investors are looking for when they consider investing in Europe,” McCartney told CNBC’s “Europe Early Edition” on Monday.
https://www.cnbc.com/2025/10/20/tkms-taps-into-europes-defense-boom-with-frankfurt-ipo.html
