Rolls-Royce to sell commercial marine business for £500m

Rolls-Royce has signed an agreement to sell its Commercial Marine business to Norwegian firm Kongsberg, as part of work to simplify its business.

The move followed a strategic review by Rolls-Royce of its Commercial Marine operations first announced in January, and includes propulsion, deck machinery, and automation and control.

The deal is worth a total of £500m, but taking into account pensions and other liabilities the net proceeds to Rolls-Royce will be between £350m and £450m.

Kongsberg is an international knowledge-based group with clients in the oil and gas, defence, aerospace and merchant marine sectors. It has 7000 employees in more than 25 countries. Rolls-Royce’s Commercial Marine business has approximately 3,600 employees mostly based in the Nordic region.

“This transaction builds on the actions we have taken over the last two years to simplify our business,” said Warren East, chief executive of Rolls-Royce. “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.”

Geir Håøy, chief executive and president of Kongsberg said the acquisition made the company a “more complete supplier”. “The maritime industry is becoming increasingly globalised 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,” he said.

The transaction is expected to close in the first quarter of 2019, subject to clearance from regulatory authorities.