Rolls-Royce signs agreement to sell Commercial Marine business to Kongsberg
Staff Writer |
Rolls-Royce announced that it has signed an agreement to sell its Commercial Marine business to Kongsberg for an enterprise value of £500m and net proceeds of around £350m to £400m.
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Kongsberg, headquartered in Kongsberg, Norway, is an international, knowledge-based group delivering high technology systems and solutions to clients within the oil and gas industry, merchant marine, defence and aerospace sectors.
Kongsberg is represented in more than 25 countries with approximately 7,000 employees and has a turnover of NOK 14.5bn (2017). In the maritime industry, the companies are complementary in their products, solutions and competence.
The move follows a strategic review by Rolls-Royce of its Commercial Marine operations announced in January 2018.
The sale includes propulsion, deck machinery, automation and control, a service network spanning more than 30 countries and ship design capability, which to date has seen around 1,000 ships of Rolls-Royce design delivered to offshore, cargo, passenger and fishing vessel customers worldwide.
Rolls-Royce’s Ship Intelligence activities, which have seen the rapid development of technologies to enable remote and autonomous operation of commercial vessels, are also included.
Kongsberg will, through a trading arrangement, continue to have access to products from Bergen Engines, which remains part of Rolls-Royce Power Systems.
The Bergen engine range of both diesel and gas medium-speed engines is a key component that will enable Kongsberg to be a leader in the continued development of integrated ship systems.
Kongsberg will also be an important partner and supplier to Rolls-Royce’s Defence business for the supply of Commercial Marine products used on Naval vessels.
Rolls-Royce Power Systems will continue to supply MTU engines to a range of customers in the marine market including operators of commercial vessels and yachts.
The Naval gas turbine propulsion activities will continue to be a core part of Rolls-Royce Defence.
Commercial Marine has approximately 3,600 employees, with the majority based in the Nordic region.
In 2017 the Commercial Marine business generated revenue of £817m with an operating loss of £70m reflected in the Group’s financial results.
After taking into account various central cost recharges included in this reported figure, the disposal is expected to have had around a £50m positive profit impact based on 2017 pro forma figures.
These figures were consolidated within the results of Rolls-Royce Marine. ■