Celsius To Create Big Submarine Builder

Swedish defense group Celsius announced that it was merging unit Kockums Naval Systems with Germany's Howaldtswerke-Deutsche Werft (HDW) to create a leading global player in submarines as the defense sector consolidates. Celsius signed a contract with Babcock Borsig and HDW parent company Preussag, Germany's tourism and industrial group, to form a European shipbuilding company. "The merger of these two shipbuilding companies creates the world's strongest builder of submarines, a company with the most advanced technology and a commanding position in the conventional (non-nuclear) submarine sector," Celsius said. Under the agreement, Preussag will sell 25 percent plus one of its HDW shares to Celsius. At the same time, HDW will acquire all shares in Kockums Naval Systems from Celsius. The deal is scheduled to be completed by October 1. No financial details were given. HDW's new ownership structure, to be reviewed after 2000, will comprise of Babcock Borsig with 50 percent plus one share, Celsius with 25 percent plus one share and Preussag with 25 percent minus two shares. A Celsius spokesman said the agreement gave Celsius the chance to increase its stake in the new company to 50 percent. Celsius said an agreement had been reached between Celsius and HDW settling the acquisition of Celsius's 49 percent stake in Australian submarine builder, Australian Submarine Corp.