Norway’s Kongsberg Group has entered into agreement with Rolls-Royce plc to acquire Rolls-Royce Commercial Marine.
The transaction is structured as an acquisition by Kongsberg of the marine products, systems and aftermarket services businesses carried out by subsidiaries of Rolls-Royce. The transaction does not include Bergen Engines nor Rolls-Royce’s Naval Business.
The parties have agreed a value for Rolls-Royce Commercial Marine of GBP 500 million (on a cash and debt free basis and with working capital at an agreed level). The final purchase price will be determined based on Rolls-Royce Commercial Marine’s cash, debt and working capital at time of completion of the transaction.
“The maritime industry has over the last years experienced demanding market conditions and even though there is still uncertainty we expect the market to be facing growth with technology and innovation being key drivers. For more than 200 years Kongsberg has been a pioneer for high technology industrial development with a long term perspective. The acquisition of Rolls-Royce Commercial Marine is in line with our growth ambitions,” commented Eivind Reiten, chairman of Kongsberg.
“The acquisition of Rolls-Royce Commercial Marine makes us a more complete supplier to the maritime industry. The maritime industry is becoming increasingly globalized and is undergoing considerable technological and market driven changes. With this acquisition we will strengthen our strategic position with shipowners, shipyards and other customers and partners,” added Geir Håøy, CEO and president.
Kongsberg is represented in more than 25 countries, while Rolls-Royce Commercial Marine is represented in 34 countries. Rolls-Royce has approximately 3,600 employees and an annual turnover of NOK 8.9 billion (2017); Kongsberg has approximately 7,000 employees and a turnover of NOK 14.5 billion (2017). Combined, the companies have equipment and deliveries to around 30,000 vessels worldwide.
The completion of the acquisition is subject to clearance by regulatory authorities in several jurisdictions. Subject to such regulatory clearance, the acquisition of Rolls-Royce Commercial Marine is expected to be completed in first quarter of 2019.
Photo: Kongsberg CEO Geir Håøy (right) and Tristan Halford-Maw, Deputy Director, M&A Rolls-Royce