×

UPDATE 1-German cartel office will not block expansion of warship consortium

(Adds comment from companies, ministry)

BERLIN, July 19 (Reuters) - Germany's federal cartel office said on Wednesday it would not block moves to expand an industry consortium that is due to build five new military corvettes for the German military, after finding no evidence of antitrust concerns.

The decision paves the way for Luerrsen Werft and Thyssenkrupp to add German Naval Yards to its existing consortium, and moves the Defence Ministry closer to a contract for the new ships.

German Naval Yards, Thyssenkrupp and the ministry welcomed the decision. The companies said they would now continue negotiations about how to share the work on an order valued at 1.5 billion euros ($1.73 billion).

"Our conclusion produced no evidence that the ban on cartels had been breached," cartel office head Andreas Mundt said in a statement.

The companies decided to join forces after a German court upheld a protest that German Naval Yards had filed against the ministry's decision to skip an open competition for the corvettes, a decision that was then challenged by the ministry.

A spokesman for German Naval Yards declined to comment about whether the company would now withdraw its protest.

Legal experts said they expected the company to withdraw the protest once discussions with the other companies were completed.

The ministry has defended its decision not to have an open competition, arguing that the quickest way to meet the navy's urgent needs in the Baltic and Mediterranean seas would be to buy more of the ships produced by the consortium. ($1 = 0.8673 euros) (Reporting by Sabine Siebold; Writing by Joseph Nasr and Andrea Shalal; Editing by Michelle Martin and Alison Williams)