Carlyle drops out of bidding process for Thyssenkrupp marine unit

By Christoph Steitz

FRANKFURT (Reuters) -Private equity firm Carlyle has dropped out of an ongoing bidding process for the warship division of stricken conglomerate Thyssenkrupp, the German company said on Tuesday.

News about Carlyle dropping out of the process for Thyssenkrupp Marine Systems (TKMS) is a major blow to Thyssenkrupp's restructuring, which also includes plans for a 50:50 steel joint venture with Czech billionaire Daniel Kretinsky.

"We can confirm that the investment company Carlyle Group has informed us that it is withdrawing from the bidding process for the investment in Thyssenkrupp's marine division," Thyssenkrupp said in a response to emailed questions.

Thyssenkrupp shares fell as much as 3.7% on the news.

The company did not say why Carlyle had exited the process, adding it was now focusing on a spin-off of the division, which builds submarines and frigates, but remained open to industrial partnerships.

Carlyle declined to comment.

Sources told Reuters in June that Carlyle and state-lender KfW were in talks to jointly acquire a majority in TKMS. They said at the time the business was valued at around 1.6 billion euros ($1.73 billion).

Thyssenkrupp Chief Executive Miguel Lopez in August told analysts he was confident that efforts to sell TKMS, either to a consortium of buyers or via a spin-off, would succeed in "coming months".

Thyssenkrupp, which also produces car parts and operates a big materials trading business, said it remained in talks with the government about a possible participation in TKMS, which generated nine-month operating profit (EBIT) of 74 million euros, up more than two thirds year-on-year.

"We remain convinced that the naval sector can best take advantage of the industry's global growth opportunities by operating independently," Thyssenkrupp said.

"In addition, independence offers a good starting position for possible national and European consolidation."

($1 = 0.9248 euros)

(Reporting by Christoph Steitz; Editing by Jo Mason, Madeline Chambers and Tomasz Janowski)