"If the conditions were right, we'd have nothing against a Franco-German solution," Schroeder told a news conference here.

But he added: "We hope there'll be a German solution."

Howaldtswerke Deutsche Werft (HDW) is the world's leading maker of conventional submarines.

And its current owners, the investment fund One Equity Partners, have signalled they want to sell the company, sparking interest from a number of potential buyers, ranging from German heavy industry giant ThyssenKrupp, to the French state-owned shipbuilding group Direction des constructions navales (DCN), French defence company Thales and even US defence group Northrop Grumman.

The German government wants to make sure that HDW know-how remains in German hands "so we'd therefore have an interest in finding a German solution," Schroeder said.

ThyssenKrupp recently revealed it had made an offer to buy HDW, but refused to reveal any details about its bid.

Last month, French Finance Minister Francis Mer said he thought a merger between French DCN and HDW would be a good idea.

"That would be a very good project, because it would give rise to synergies and allow the two companies to have a joint global presence," Mer said.

"A rapprochement would create advantages for the companies, our countries, customers and Europe," Mer argued.

WAR.WIRE