Rolls-Royce forced to drop subsidiary sale to Russia
The government of Norway announced blocking the $178 million sale of the Norwegian engine manufacturing company owned by Britain’s Rolls-Royce to Russian-controlled company THM Group after concerns appeared that the move could pose security-related implications for Norway’s navy and the civilian sector.
After a temporary suspension of the British Rolls-Royce and Russian THM Group deal over the sale of Norwegian maritime engine maker Bergen Engines, the government of Norway blocked the deal completely arguing that the planned sale of marine engine business to a Moscow-based company would boost the Russian military.
Speaking to the Parliament of the country on March 21, 2021, Justice Minister Monica Mealand, said that the Norwegian authorities have “sufficient information” to conclude that “it is necessary to prevent the company [Bergen Engines – ed.] from being sold to a group controlled from a country with which we do not have security cooperation.”
Meanwhile, the government of the country announced that the technology possessed by Bergen Engines as well as the boat engines the manufacturer produces, “would have boosted Russian military capabilities” as the planned sale “would have been of significant military-strategic interest to Russia.”
The sale of Bergen Engines was a part of Rolls-Royce's business recovery plan, which should have helped the company to raise up to $2.76 billion from disposals by 2022. However, the engine manufacturer will seek the assistance of the government for finding another option for Bergen Engines as it reportedly warned that more than 900 employees of Bergen might lose their jobs.
The concerns over the Bergen engines sale arose on March 9, 2021, when the Norwegian National Security Authority (NSM) expressed its doubts over a “significant uncertainty in relation to national security interests.” The government immediately took action and temporarily suspended the $178 million deal while the NSM was assessing the wider implications of the commercial move on the country‘s security.
As a response, on March 10, 2021, the Russian embassy in Norway said that the suspension of sale showed anti-Russian sentiment and was of serious concern.
Bergen Engines is one of the suppliers for Norway's navy, which also manufactures diesel engines for marine and power generation customers globally.
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