Adds TKMS shares, details on order backlog

BERLIN, July 6 (Reuters) - A decision by Canada to select German submarines over South Korean competitors in an ongoing contract battle would be a good starting point for long-term strategic cooperation and would bring Ottawa closer to Europe, a senior German government official said on Monday.

Canadian Prime Minister Mark Carney, who ⁠has been looking to strengthen trade ties with Europe in light ⁠of ​persistent tensions with ​the administration of U.S. President Donald Trump, will announce on Monday the preferred bidder, shortly before he heads to a NATO leaders' summit in Turkey, the Globe and Mail reported on Sunday.

Berlin would welcome a positive signal in the context of the NATO summit that starts on Tuesday, said the official, adding: "This would have a genuine transatlantic dimension."

The two contenders for the contract for 12 submarines are German warship builder TKMS TKMS.DE, along with partner Norway, and South Korean shipbuilder Hanwha Ocean 042660.KS.

Shares in TKMS were 2.7% higher in early afternoon trading. Brokerage Metzler has reckoned that TKMS, which was spun off from Thyssenkrupp last year, could more than triple its order backlog to €68 billion ($78 billion), citing the Canadian order among other factors.

German Chancellor Friedrich Merz has invested considerable political effort in the deal in recent weeks and months, added the German official.

"We'll see in the coming days whether this effort bears fruit."

TKMS CEO Oliver Burkhard told Reuters in January that it was in talks with Norwegian and German companies to offer a multi-billion dollar investment package spanning rare earths and battery chemicals to win the tender.

($1 = 0.8758 euros)