Rolls-Royce signs agreement to sell Commercial Marine business to KongsbergStaff Writer | July 6, 2018
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.
Acquisition Kongsberg is represented in more than 25 countries
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. ■