TKMS Navigates a Cross-Current of Rival Bids and Billion-Dollar Submarine Tenders

Rheinmetall challenges TKMS with rival bid for German Naval Yards Kiel as TKMS eyes €63B in submarine and frigate contracts, boosting revenue forecasts.

The waters around Germany’s naval defence sector are churning. Rheinmetall has lobbed in a rival offer for German Naval Yards Kiel, directly challenging Thyssenkrupp Marine Systems’ earlier bid for the CMN Naval-owned yard. The Düsseldorf-based group, fresh off its roughly €1.5 billion acquisition of Lürssen’s marine division, is now pushing to expand its naval footprint even further. Both suitors are keeping the financial terms under wraps, and TKMS has described its own January offer as merely an opportunity rather than a must-have deal.

This Werftenstreit — the battle for shipyard control — erupts just as TKMS stares down a summer packed with three mega-contracts that could reshape its trajectory. The most immediate prize is Canada’s decision on twelve conventional submarines, expected between May and June, with a potential value of up to €37 billion. TKMS, offering the Type 212CD design, is seen as the last bidder standing. Ottawa’s verdict alone could vault the company into an entirely new league.

Then there is Germany’s own F127 frigate programme, worth an estimated €26 billion. TKMS is the sole bidder, and the Bundestag’s budget committee is slated to vote on financing in June. The ships would be built in partnership with NVL. A green light from Berlin would add another layer of long-term revenue visibility to an already bulging order book.

That order book, which crossed the €20 billion mark after a follow-on contract from Norway, underpins the company’s confidence. TKMS raised its revenue growth forecast for the current fiscal year to between 2% and 5%, up from an earlier range of minus 1% to plus 2%. In the first quarter of 2025/26, it posted sales of €545 million and a gross margin of 17%. To keep pace with demand, the group plans to invest over €200 million in the coming years, including a new submarine production line in Wismar that will eventually create up to 1,500 jobs by the end of 2029.

The company is also shoring up its technological edge. A new research centre focused on underwater sensor technology is in the works, developed in partnership with US defence giant General Dynamics. That alliance is designed to cement TKMS’s market leadership, even as the near-term scuffle over German Naval Yards continues.

Meanwhile, Rheinmetall is not standing still. Its marine division boasts an order backlog of €5.5 billion, and the German government is in talks over the follow-on F126 frigate class, where costs could balloon to €14 billion. The Düsseldorf group’s aggressive push into naval shipbuilding signals that it sees the sector as a core growth engine.

At the bourse, investors have taken the rivalry in stride. TKMS shares traded at around €85.80 on Thursday, up 0.35% on the day, and have gained nearly 24% since the start of the year. Yet the stock sits about 15% below its 52-week high of €100.60 hit in January. The relative strength index has dipped to 32, pointing to an oversold condition that could attract bargain hunters.

Clarity is expected soon. TKMS will release its quarterly results on 11 May, followed by its half-year report the next day. Those numbers will reveal how much financial firepower the company can bring to the bidding war for Kiel — and whether it can juggle a yard acquisition alongside the massive investments needed to deliver on its record order pipeline. For now, the summer’s outcome hinges less on balance sheets and more on decisions made in Ottawa and Berlin.