Norway prevents sale of Rolls-Royce subsidiary to Russia
March 23, 2021
Norway's government has blocked the sale of Bergen Engines, which makes motors for ships, on national security grounds.
Norway has prevented the sale of the Rolls-Royce-owned company to Transmashholding (TMH Group) in Russia on grounds of national security, the Norwegian justice minister told parliament on Tuesday.
The Bergen Engines company, owned by Rolls-Royce for more than 20 years, is based on Norway's west coast and supplies Norway's navy as well as the global shipping industry.
"The technologies possessed by Bergen Engines, and the engines they produce would have been of significant military strategic interest to Russia, and would have boosted Russian military capabilities," the Norwegian government said in a statement.
The sale would have included a medium speed engine factory, service workshop and foundry in Norway, with engine and power plant design capability, according to a statement made by Rolls-Royce.
Rolls-Royce seeking to offload to weather pandemic
Norway, which shares an Arctic border with Russia, had gradually improved relations with Moscow in the post-Cold War era until Russia's annexation of Crimea in 2014 triggered more tensions.
On March 9, the Norwegian government had temporarily suspended the 150 million euro ($178 million) sale of Bergen Engines to TMH Group while it assessed the security implications.
"We now have sufficient information to conclude that it is necessary to prevent the company from being sold to a group controlled from a country with which we do not have security cooperation," Justice Minister Monica Maeland of the center-right minority government told parliament on Tuesday.
The opposition parties in Norway have criticized the government for being slow to respond to what they saw as an emerging national security threat, after Rolls-Royce had informed authorities of a potential deal with Russia late last year.
In response to the March 9 suspension of the deal, Russia, the following day, said that Norway's decision showed anti-Russian sentiment and was of serious concern.
Rolls-Royce said last month that the transaction with Russia's TMH Group was part of the group's overall plan to overcome the COVID-19 pandemic. Bergen Engines employs roughly 950 people and logged revenues of approximately €270 million in 2019.