Rolls-Royce (RR) has signed an agreement to sell its Commercial Marine business, to Kongsberg for an enterprise value of approximately € 565.4 m.
The net proceeds will be between € 395.8 m to € 452.3 m.
Remote and Autonomous Operation Technology Included
The move follows a strategic review by RR of its Commercial Marine operations announced in January 2018. The company wishes to focus on its 3 core businesses of Civil Aerospace, Defence and Power Systems.
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 1000 ships of RR design delivered to offshore, cargo, passenger and fishing vessel customers worldwide. RR's Ship Intelligence activities, which have seen the rapid development of technologies to enable remote and autonomous operation of commercial vessels, are also included.
Bergen Engines, Power Systems and Defence Business
Kongsberg will, through a trading arrangement, continue to have access to products from Bergen engines, which remains part of RR Power Systems. The Bergen engine range comprises both diesel and gas medium-speed engines.
Kongsberg will also be an important partner and supplier to RR's Defence business for the supply of commercial marine products used on naval vessels.
RR 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 RR Defence.
Commercial Marine
RR's Commercial Marine business has approximately 3600 employees, with the majority based in the Nordic region. In 2017, the commercial marine business generated revenue of € 923.9 m with an operating loss of € 79.2 m reflected in the Group's financial results. The disposal is expected to result in a € 56.5 m positive profit impact.
Kongsberg
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. The company is represented in more than 25 countries with approximately 7000 employees and has a turnover of € 1.54 bn (2017). In the maritime industry, the companies are complementary in their products, solutions and competence. Kongsberg hopes the acquisition will mage them a more complete supplier.
The transaction has been approved by the boards of both RR and Kongsberg and is expected to close in Q1 2019, subject to clearance from the regulatory authorities.
Picture: The RR Remote Operating Centre, designed to redefine the way in which vessels are controlled (by RR).
