Germany plans majority stake in cruise ship builder, sources say

5:55 am Thursday, August 22nd, 2024

By Klaus Lauer

BERLIN (Reuters) – The German government plans to take a temporary majority stake in Meyer Werft, one of the world’s top cruise ship builders, as part of measures to support the company, sources familiar with the matter told Reuters on Thursday.

The company has orders in the pipeline, including from U.S. entertainment group Disney, but needs to raise almost 2.8 billion euros ($3.1 billion) to help finance its activities due to delayed effects of a lull in demand during the pandemic.

Chancellor Olaf Scholz and members of the state government in Lower Saxony, where the more than 200-year-old shipbuilder is based, are expected to convey this message at a meeting with staff later on Thursday, the sources said.

Scholz’s government, the state and the family owners of the company have agreed in principle and set out the key points of the arrangement, according to the sources.

German Economy Minister Robert Habeck declined to give details on the government’s talks with Meyer-Werft on Thursday, but said solutions were in reach.

“We at the Ministry of Economic Affairs have been working intensively on solutions in recent weeks and solutions are possible,” he said, praising Meyer-Werft as a productive company with a long-standing tradition.

The federal government did not comment specifically on the matter and spoke only of ongoing talks. A spokesman for the economy ministry of Lower Saxony declined to comment.

The federal and state governments want to contribute 400 million euros in equity, secure bank loans with guarantees and temporarily take over at least 80% of the shipyard, they said, adding that the national and local parliaments would have to agree on the measures once all the details are agreed.

Part of the deal includes a right of first refusal for the Meyer family in the event of a state exit in future years.

“The planned involvement of the federal and state governments will not only save the Papenburg and Rostock sites, but also important parts of the shipbuilding industry throughout Germany,” said Daniel Friedrich of the IG Metall union.

($1 = 0.8976 euros)

(Additional reporting by Petra Wischgoll in Cologne; Writing by Rachel More; Editing by Miranda Murray and David Holmes)