Rheinmetall eyes rival KMW and Thyssen submarine arm - Handelsblatt
FRANKFURT (Reuters) - German tank manufacturer Rheinmetall is interested in a takeover of rival Krauss Maffei Wegmann (KMW) [KMGER.UL] and ThyssenKrupp's submarine business, German daily Handelsblatt said on Friday, citing unnamed company sources.
Rheinmetall and ThyssenKrupp declined to comment. Krauss Maffei Wegmann was not immediately available for comment.
Rheinmetall wants to bulk up in response to efforts by KMW to combine with French rival Nexter, a move designed to help them withstand defence-spending cuts, the paper said.
Last month, Germany's economy minister urged the country's arms industry to consolidate with European peers, making clear that years of expansive exports were over.
KMW is standing by plans to merge with Nexter despite reports the German economy minister favours an all-German deal between KMW and Rheinmetall, who together build Puma tanks for Germany's Bundeswehr.
Rheinmetall is also interested in buying ThyssenKrupp's Marine systems business, Handeslblatt said.
To help finance the deal, Rheinmetall could sell its automotive division Kolbenschmidt Pierburg to Thyssen, the paper also said.
An industry source said Thyssen was understood to be ready to talk about selling its Marine Systems unit - which includes submarines and had revenue of 1.3 billion euros (1.03 billion pounds) in 2012/13 - for the right price.
In exchange, Rheinmetall could buy ThyssenKrupp's submarine manufacturing division HDW [HOWA.UL], the paper said, adding Rheinmetall could also buy Airbus units Atlas Elektronik or Optronics.
(Reporting by Edward Taylor in Frankfurt, Matthias Inverardi and Anneli Palmen in Duesseldorf, with Sabine Siebold in Berlin; Editing by David Holmes)
