Friday, November 08, 2019
Heckler & Koch's order books are full. However, it is not good for the Baden-Württemberg arms manufacturer: the mountain of debt is great, the financial situation tense. Now, a potential buyer is interested in the company.
The heavily indebted arms manufacturer Heckler & Koch is about to change ownership. The Oberndorf company in Baden-Württemberg has announced that it is aware of an acquisition request to the Federal Ministry of the Economy. It should be an investor who is already involved in the company to a lesser extent and wishes to have a majority. The company did not anticipate a change in the previous business strategy.
So far, the Waffenschmiede, which is considered the home supplier of the Bundeswehr and has produced, for example, the standard G36 assault rifle, to just under two thirds of the German investor Andreas Heeschen. The financial situation of the company with its more than 900 employees is tense, the mountain of debts is large. After two years of losses, however, things look better again in 2019 and the top of the company is aiming for a small profit. The order books are full.
According to a "Focus" report, the potential buyer is a conglomerate of companies from different regions of the world, namely the Caribbean island of Barbados, the United States, New Zealand, Malta and Luxembourg. A central role is played here by a Frenchman named Nicolas Walewski. The acquisition project has already been reported to the Federal Ministry of Economics a year ago. The authority has passed according to the report now the federal intelligence service, in order to examine the corporate conglomerate. The ministry did not confirm the report on request.
German security architecture: the FDP has "abdominal pain"
Heckler & Koch said: "We welcome the fact that the sales process by the Federal Ministry of the Economy and Energy will be examined in accordance with applicable law, as required by the German foreign trade regulation and on payments ".
H&K's sales plans have been criticized. The spokesman of the economic policy of the flight service in the Bundestag, Reinhard Houben, said that special attention should be paid when selling a German defense contractor to foreign companies in order not to compromise the security architecture of the Federal Republic. "With an acquisition by large arms companies from other EU states, I see it less problematic – if it went to investors from other parts of the world, I would have a stomach ache."
It would not be entirely new, however, if the traditional company soon passed to a foreign majority owner. After the end of the Cold War, in which the H&K business had flourished, sales had collapsed, in the first few years there was a change of ownership. A British arms company, today BAE Systems, has taken the lead. In 2002, however, the British separated from their German daughter and Heeschen grabbed him. 17 years later, the witness is probably transferred, perhaps again abroad.