Having temporarily suspended the proposed sale of Rolls-Royce-owned Bergen Engines to Russia’s TMH Group earlier this month, the Norwegian government has now announced it will block the sale of the Norwegian business on security grounds.
The agreed sale price was approximately US$178 million. Bergen Engines has been owned by Rolls-Royce for over 20 years and has supplied NATO member Norway’s navy as well as global shipping. “We now have sufficient information to conclude that it is necessary to prevent the company from being sold to a group controlled from a country with which we do not have security cooperation,” Justice Minister Monica Maeland of the centre-right minority government told parliament. “The technology possessed by Bergen Engines, and the engines they produce, would have been of significant military strategic interest to Russia, and would have boosted Russian military capabilities,” the Norwegian government said in a statement.
Rolls-Royce has indicated that it is still determined to dispose of the asset and has turned to the Norwegian government for help in finding another buyer, pointing out that up to 900 jobs could be at stake. “We do not intend to retain the business,” Rolls-Royce said in a statement. “We will be seeking the assistance of the Norwegian Government to swiftly find another option, which can provide Bergen Engines and its people with the investment required for the future and Rolls-Royce with an appropriate outcome.”
TMH Group said it was disappointed by Norway’s decision. “Throughout the transaction process TMH has remained as transparent as possible regarding the ownership structure and development plans for Bergen Engines,” TMH Group said in a statement issued to Reuters news agency. “In the course of TMH’s preparation for the transaction, nothing has been found that would indicate that the Norwegian Security Act applies to the transaction.”Email Post to a Friend