Berlin must decide quickly whether it will purchase a stake in Thyssenkrupp’s defence division TKMS. A leading official of the labour movement has called for clarity before a crucial supervisory board meeting scheduled for later this month.

Daniel Friedrich, the head of Germany's largest union IG Metall, said that if Berlin became a shareholder in TKMS, it would help the company to form future partnerships with other defence firms, many of whom also count governments as investors. This is at a moment when the sector has been boosted by a surge in military spending.

Thyssenkrupp is in discussions with Berlin regarding the future of TKMS. However, the company has stated that government participation isn't a prerequisite for a planned spin-off later this year.

Friedrich, the leader of the IG Metall division that represents coastal workers, said: "The issue of a state entrance must be clarified within the next few weeks." "We must know when and how it will take place."

Friedrich stated that he would prefer the government to make a decision on the spin-off plan of TKMS before the supervisory board of Thyssenkrupp meets at the end June. This would allow 49% of TKMS to be given as a dividend to Thyssenkrupp investors.

"The state must decide now." The state can buy shares at the stock market later, but it would be costly," Friedrich said. There is the option of Thyssenkrupp selling shares to the government.

The German Economy Ministry refused to comment. The Defence Ministry didn't immediately respond to an inquiry for comment.

Friedrich also added that future consolidation of the defence sector is not limited to Europe.

He said that the chances of consolidation are higher with Northern Europe and Canada than with Italy or France. (Reporting and editing by Kirsten Doovan; Tom Kaeckenhoff and Christoph Steitz)

(source: Reuters)