The German company that produces 70% of NATO submarines has a $12 billion plan in the immediate vicinity of the US

Warship builder TKMS is currently in talks with Norwegian and German companies to offer Canada an investment package worth billions of dollars in a highly competitive tender for submarines, the German company's CEO said, as it seeks to beat a rival bid from South Korea.

Ongoing negotiations go beyond submarines and cover possible investment commitments in rare metals, mining, artificial intelligence (AI) and battery production for the automotive sector, CEO Oliver Burkhard was quoted as saying by the news agency.

This investment plan could boost TKMS in its bid to win the tender after it was selected last year, along with South Korea's Hanwha Ocean, to supply up to 12 state-of-the-art submarines to the Canadian Navy.

The plan reflects Germany's stepped-up efforts to strengthen defense cooperation amid rising geopolitical tensions as the U.S. seeks to reclaim Greenland and threatens to impose new tariffs on imports from European allies while Russia continues its war in Ukraine.

The investment package goes far beyond submarines

Burkhard said TKMS is in talks with German start-up Isar Aerospace about the investment initiative, but did not name the other companies involved in the negotiations.

The order for the submarines alone is estimated at more than 10 billion euros ($12 billion), according to industry sources. The total package could be worth significantly more, depending on investment commitments from other sectors, according to people briefed on the discussions.

“It's no longer just about submarines. It's primarily about what's beyond them,” Burkhard told Reuters on the sidelines of an event in Frankfurt, adding that the goal was a “comprehensive economic package” aimed at convincing the Canadian government of the German company's offer.

TKMS is the world's largest producer of non-nuclear submarines and owns approximately 70% of NATO's conventional fleet.

Burkhard added that TKMS asked potential partners about predictable investment decisions in Canada and whether to include them in so-called offset obligations, or binding financial commitments, that are made over a 30-year period.

“Of course, that includes the defense sector,” he said.

Canada, which has the world's longest coastline, has said plans to buy new submarines are aimed at maximizing economic benefits as part of its defense strategy.

Burkhard, who will make his next visit to Canada in March for more negotiations, also said that Germany's economy and defense ministries as well as the Chancellery in Berlin have also participated in the talks, adding that he expects Canadian authorities to make a decision in 2026.

Germany's economy ministry referred Reuters to the defense ministry, which said it does not, in principle, comment on confidential consultations.

Germany's chancellery and Canada's economy and defense ministries did not immediately respond to requests for comment.

Hanwha Ocean also declined to comment.

Hanwha Ocean declined to comment.

TKMS, which Burkhard says has between 30 and 40 employees involved in the compensation package, is offering its 212CD-class submarine as part of the tender, which it is also supplying to the Norwegian Navy as part of a joint modernization initiative.