German submarine manufacturer prepares multi-billion investment package for Canada
TKMS is offering investments in rare earth metals, artificial intelligence, and automotive batteries in its competition with a South Korean rival.
German naval shipbuilder TKMS is developing a major proposal for Canada as part of a submarine procurement competition. The company's CEO, Oliver Burkhard, announced that negotiations are underway with Norwegian and German partners to put together an investment package worth several billion dollars.
Investments Will Span Multiple Industries
The proposed package goes far beyond defense. Burkhard told Reuters that discussions involve possible investments in rare earth mining, the mining industry, artificial intelligence technologies, and car battery production.
Among potential participants in the initiative, the TKMS chief mentioned German space startup Isar Aerospace, though the names of other companies involved in the talks have not been disclosed.
Competition for a Major Contract
Last year, TKMS and South Korea's Hanwha Ocean were shortlisted as finalists to supply up to 12 modern submarines for the Canadian Navy. This previously undisclosed investment package strategy could strengthen the German manufacturer's position in the competition.
According to industry sources, the contract for the submarines alone is worth over 10 billion euros (12 billion US dollars). The total package, including investment commitments from other sectors, could be significantly larger, informed sources note.
Strategic Approach to the Tender
Burkhard emphasized that the company is focusing on more than just supplying military equipment. "It's primarily about what goes beyond that," he said at an event in Frankfurt, adding that the goal is to create a "broad economic package" to convince the Canadian government.
TKMS is surveying potential partners about their investment plans in Canada and the possibility of including these commitments in offset obligations—mandatory financial commitments over a 30-year period.
Geopolitical Context
The intensified efforts reflect Germany's desire to strengthen defense cooperation amid growing geopolitical tensions. This comes against the backdrop of US claims on Greenland and threats of new import tariffs on European allies, as well as Russia's ongoing war in Ukraine.
Canadian visa centers in Russia have stopped ...
The number of people wanting to join the Cana...
China offers Canada joint production of elect...
Trump stripped Canada of its seat on the pres...
Canadians rallied around Prime Minister Carne...
Arctic cold has covered Canada with temperatu...
Trump lashed out at Carney after his speech i...
Canadian companies plan to raise salaries by ...
Gold breaks records and continues to rise des...
Prime Minister Carney concludes a nine-day wo...
Cenovus Energy is preparing to sell assets in...
Carney in Davos declared the breakdown of the...
Canada, which has the world's longest coastline, says its plans to acquire new submarines are aimed at maximizing economic benefits as part of its defense strategy.
Further Negotiations
The discussions involve Germany's ministries of economy and defense, as well as the chancellery. Burkhard is planning his next trip to Canada in March to continue negotiations and expects the Canadian side to make a decision during 2026.
TKMS is offering the Class 212CD submarine as part of the tender, which the company is also supplying to the Norwegian Navy under a joint modernization program. Between 30 and 40 company employees are working on preparing the offset obligations package.
TKMS is the world's largest manufacturer of non-nuclear submarines and supplies about 70% of NATO's conventional submarine fleet.
