Rolls-Royce to sell off £500m Commercial Marine arm

Manufacturing giant Rolls-Royce has struck a deal to sell off its £500m Commercial Marine arm.

The company this morning (July 6) revealed plans for Scandinavian tech group Kongsberg to acquire the business, on the back of a strategic review announced in January.

Commercial Marine employs around 3,600 people, the majority of whom are based in the Nordic region.

In 2017, it generated a £70m operating loss against revenues of £817m.

The sale, expected to deliver net proceeds of between £350m and £400m for Rolls-Royce, will includes a service network spanning over 30 countries.

For Kongsberg, it will provide a ship design capability that, to date, has provided around 1,000 ships of Rolls-Royce design to cargo, passenger, offshore and fishing vessel customers all over the world.

Rolls-Royce chief exec Warren East said: “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.”

Kongsberg’s president and CEO, Geir Håøy, commented: “The acquisition of Rolls-Royce Commercial Marine makes us a more complete supplier to the maritime industry.

“The maritime industry is becoming increasingly globalised and is undergoing considerable technological and market driven changes.”

Mr Håøy added: “With this acquisition we will strengthen our strategic position with shipowners, shipyards and other customers and partners.”

Commercial Marine president Mikael Makinen said the deal marks “the start of a new horizon” for the business, coming “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.

He continued: “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 am sure that this business will prosper in the years to come.”

The transaction is forecast to close in Q1 2019, subject to approval from the regulatory authorities.