The following is text of a news release from Kongsberg:
(KONGSBERG, Norway) — Kongsberg Gruppen ASA on Friday entered into agreement with Rolls-Royce PLC 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 a value for Rolls-Royce Commercial Marine of $661 million (U.S.), 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," 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 strengthening our strategic position with shipowners, shipyards and other customers and partners," said Geir Haoy, CEO and president of Kongsberg.
Kongsberg is represented in more than 25 countries, while Rolls-Royce Commercial Marine is represented in 34 countries. Rolls-Royce Commercial Marine has approximately 3,600 employees while Kongsberg has approximately 7,000 employees. 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, while 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 Haoy.
“This deal is good news for Rolls-Royce and Kongsberg and 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 combination of great people, market leading technology and a desire by Kongsberg to take this business to the next level, I’m sure that this business will prosper in the years to come," said Mikael Makinen, Rolls-Royce president, Commercial Marine.
Rolls-Royce Commercial Marine has experienced considerable reductions in activity levels due to challenging market conditions within offshore related activity. A 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, while the company will have a stronger Nordic and international position.
Subject to such regulatory clearance, the acquisition of Rolls-Royce Commercial Marine is expected to be completed in first quarter of 2019.
