Rolls-Royce Plc agreed to sell its Commercial Marine business to Kongsberg for £500 million ($663 million), with net proceeds £350 million to £400 million ($465 million to $530 million), after resolving the business’s pension liabilities and other costs.
The sell-off of Commercial Marine was a plan announced in January of this year, as part of downsizing and restructuring effort underway at Rolls-Royce since 2014.
Last month, the group announced it would reorganize its five business units into three, to create a “simpler, leaner and more agile organization”, closer to customers and emphasizing new technologies.
The sale includes Rolls’ non-naval marine propulsion technologies, deck machinery, automation and control, a service network in more than 30 countries, plus ship design capability for offshore, cargo, passenger, and fishing vessel customers.
Kongsberg is a Norwegian engineering group for oil-and-gas, merchant marine, defense, and aerospace industries.
Rolls-Royce CEO Warren East stated: “This transaction builds on the actions we have taken over the last two years to simplify our business. The sale of our Commercial Marine business will enable us to focus on our three core businesses and on meeting the vital power needs of our customers.”
Rolls-Royce and Kongsberg have agreed to set up a trading arrangement through which the latter will continue to purchase products from the Rolls-Royce Power Systems Bergen Engines business, including both diesel and gas medium-speed engines.
Rolls-Royce Power Systems will continue to supply MTU engines to marine customers, including operators of commercial vessels and yachts.
The Naval gas turbine propulsion activities will as part of the Rolls-Royce Defence business unit.
Geir Håøy, president and CEO of Kongsberg, said: “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.”