Berlin needs to act quickly on possible TKMS stake buy, union leader says

By Tom Käckenhoff and Christoph Steitz

DUESSELDORF/FRANKFURT (Reuters) -Berlin needs to decide soon whether it will buy a stake in Thyssenkrupp's defence division TKMS, a leading labour official said, calling for clarity on the matter before a key supervisory board meeting planned for later this month.

Daniel Friedrich of Germany's biggest union IG Metall said that if Berlin becomes a TKMS shareholder, it could help the company in future tie-ups with other defence companies, many of which also have governments among their investors, at a time when the sector is getting a boost from a ramp up in military spending.

Thyssenkrupp has been in talks with Berlin about the future of TKMS, but has said government participation is not a precondition of a spin-off of the business planned for later this year.

"The question of a state entry must be clarified in the coming weeks," Friedrich, who leads the division of IG Metall that represents workers in coastal areas, told Reuters. "We need to know when and how this will happen."

Friedrich said that ideally the government would make a decision before Thyssenkrupp's supervisory board meets at the end of June to approve the planned spin-off of TKMS, which would see 49% of the unit given to Thyssenkrupp's investors as a dividend in kind.

"The state should decide now. It can also buy shares on the stock exchange later, but that would be expensive," Friedrich said. "There is also the possibility of the state acquiring shares in the new company from Thyssenkrupp."

Germany's Economy Ministry declined to comment. The Defence Ministry did not immediately respond to a request for comment.

Friedrich added that any future defence sector consolidation was not limited to Europe.

"Chances of consolidation with the Northern Europeans and Canada are greater than with Italy and France," he said.

(Reporting by Christoph Steitz and Tom Kaeckenhoff; Editing by Kirsten Donovan)