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Kongsberg Maritime completes sales of Hydroids, temporarily laid off around 400 employees

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Christian Fernsby ▼ | March 27, 2020
Kongsberg Maritime, a wholly-owned subsidiary of Kongsberg Gruppen, has completed the sale of its U.S. based underwater technology company Hydroid to Huntington Ingalls Industries (HII).
Kongsberg Maritime
Kongsberg Gruppen   Kongsberg Maritime
In a press release on 4 February 2020, Kongsberg announced that KM had entered into an agreement with HII on the sale of the wholly-owned subsidiary Hydroid, Inc. for USD 350 million on a debt-free and cash-free basis and as adjusted off an agreed upon working capital. The transaction has now been completed.

Topics: Kongsberg Maritime Hydroids

HII is the largest supplier of vessels to the US Navy. In connection with the transaction, KM and HII have entered into a strategic alliance agreement effective as of March 26.

"As a result of the ripple effects of COVID-19 and the extensive measures implemented by various countries' authorities, Kongsberg is experiencing a lower level of activity than planned.

"Travel restrictions, quarantine provisions and other measures to prevent infection are causing difficulties in production and in the customer and supplier chains.

"The difficulties are especially noticeable in Kongsberg Maritime.

"Our defence activities are also affected, but to a more limited extent.

"Kongsberg Defence & Aerospace and its subsidiary Kongsberg Satellite Services are defined as essential services for society.

"Kongsberg has a sound financial position and is well equipped to deal with extraordinary situations.

"With offices, service systems and factories in 40 countries, we are able to maintain critical operations even in a situation with extensive travel restrictions.

"An international presence is especially important for Kongsberg Maritime, which has equipment installed on 30,000 ships worldwide.

"Kongsberg has almost 11,000 employees.

"As a result of the lower level of activity, we have temporarily laid off and sent temporarily lay-off notices to around 400 employees.

"In addition, temporarily layoffs and other capacity adjustments have also been implemented internationally.

"These temporarily lay-offs affect all the business areas and staff functions, and most are in the civilian business areas.

"Kongsberg Maritime has extensive international operations and is directly affected by the downturn in trade and the global economy.

"The various countries' travel restrictions especially affect parts of the service and after-sales market.

"With offices and service systems in 34 countries, project deliveries and a lot of the service assignments are carried out locally.

"However, the level of activity has been reduced, and it has for instance been decided to put certain non-critical development projects on hold as a way of ensuring liquidity.

"At the same time, the fall in the oil and gas market may lead to less activity in the offshore market.

"Kongsberg Maritime has major operations in Asia, mainly in China, South Korea and Singapore.

"In this region, where the coronavirus outbreak started and spread alarmingly in January, the authorities seem to have gained control of the situation and society appears to be returning to a more normal state."