Kongsberg Gruppen ASA has recently entered into an agreement with Rolls-Royce to acquire Rolls-Royce Commercial Marine, a world-leading technology business within maritime operations.
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 plc. The transaction does not include Bergen Engines nor Rolls-Royce’s Naval Business.
The parties have agreed on a value for Rolls-Royce Commercial Marine. The final purchase price will be determined based on Rolls-Royce Commercial Marine’s cash, debt and working capital at the 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”, said Eivind Reiten, Chair of the Board 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 be strengthening our strategic position with shipowners, shipyards and other customers and partners”, said Geir Håøy, CEO and President of Kongsberg.
Kongsberg is represented in more than 25 countries, whilst Rolls-Royce Commercial Marine is represented in 34 countries. Combined, the companies have equipment and deliveries associated to around 30,000 vessels worldwide, and the installed base and the global presence strengthens an already world leading position with a considerable aftermarket.
“The acquisition strengthens our global presence and will give increased sales and service volumes. Kongsberg is a world leader within automation, navigation and control systems, whilst Rolls-Royce Commercial Marine is complementary with its deliveries of propellers, propulsion systems, handling systems and ship design. Both companies hold leading positions within digitalization, ship intelligence and concepts for autonomy. By bringing together this we are positioning us as a significant strategic supplier of complete solutions for the future maritime industry”, said Håøy.
Mikael Makinen, Rolls-Royce President, Commercial Marine added: “Today marks the start of a new horizon for our Commercial Marine business. This deal comes at a time when the maritime industry is at the dawn of a new and exciting era where digital and electrical technologies will transform shipping. Rolls-Royce has been responsible for leading many of those technological advancements, and with a combination of great people, market-leading technology and a desire by Kongsberg to take this business to the next level, I am sure that this business will prosper in the years to come. We will now work closely with Kongsberg as we go through the transition in the months ahead. I would like to pay tribute to the 3,600 Commercial Marine employees who have maintained absolute focus on their day jobs, winning business and maintaining the levels of support our customers expect.”
Rolls-Royce Commercial Marine has experienced considerable reductions in activity levels due to challenging market conditions within the offshore-related activity. The main priority going forward is ensuring profitability, and at the same time being an industry innovation leader. The acquisition will also strengthen Norwegian ownership in the world leading Norwegian maritime cluster, whilst the company will have a stronger Nordic and international position.
The transaction has been approved by the boards of both Rolls-Royce and Kongsberg and is expected to close in the first quarter 2019, subject to clearance from the regulatory authorities.
