Saab in Talks on ThyssenKrupp Swedish Submarine Division

Saab AB, the maker of the Gripen fighter jet, said it’s in talks to buy a marine defense unit from ThyssenKrupp AG, which would put the submarine and warship production into the hands of a Swedish company.

The two companies are in “early stage” talks and signed a non-binding memorandum of understanding for the sale of ThyssenKrupp Marine Systems AB, Saab said in a statement today. The division had sales of 1.6 billion kronor ($244 million) last year and has 900 employees, according to Torben Beckmann, a spokesman for ThyssenKrupp.

Saab said a purchase of the unit, formerly called Kockums, would “meet the needs of Sweden” as well as its own ambitions to expand in the naval segment. ThyssenKrupp’s Swedish marine systems unit includes a site in Karlskrona in southeastern Sweden that was established as a naval shipyard for the Royal Swedish Navy in 1679 and builds Visby class stealth corvettes.

A purchase would allow Saab, which already provides products such as ship-control management and electronic warfare systems for submarines, to build underwater vessels. The main focus of the ThyssenKrupp operations in Malmoe is submarine design while Muskoe south of Stockholm focuses on naval maintenance.

Swedish Push

Sweden has been pushing for a new owner of the business. Swedish Defence Materiel Administration Director Lena Erixon said the country’s decision to sell submarine development to ThyssenKrupp was a “big mistake” in an interview with Svenska Dagbladet published March 19.

Saab shares traded 1.5 percent lower at 196.20 kronor at 10:13 a.m. in Stockholm after rising as much as 1.6 percent in early trading. They have gained 15 percent so far this year and traded at the highest in about seven years earlier this month.

The Linkoeping, Sweden-based defense company said in a statement on March 11 that it was hiring employees as it expands in the naval market.

Today’s statement follows months of speculation in Swedish media about the future of ThyssenKrupp’s Swedish operations. Dagens Industri reported on Oct. 14 that Saab and the Swedish Defence Materiel Administration were in talks about Saab potentially buying the Kockums shipyard to secure Swedish exports of submarines. On April 12, the newspaper reported that Saab hired 80 workers from ThyssenKrupp’s Swedish unit.

Saab Chief Executive Officer Hakan Buskhe told TV4 on April 8 that the company is prepared to buy ThyssenKrupp’s Karlskrona shipyard to add the capacity and knowledge to build submarines.

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