Norway halts asset sale by Rolls-Royce to Russian firm
Norway has suspended a planned asset sale by engine maker Rolls-Royce to a Russiancontrolled company as it assesses the security implications for the country’s navy, the justice ministry said on Tuesday.
Norway’s NSM security agency is assessing the €150m sale of Bergen Engines to a company controlled by Russia’s TMH Group, the ministry said.
Britain’s Rolls-Royce announced the planned sale on February 4 as part of a disposal plan aimed at helping the maker of engines for aircraft and ships to survive the pandemic. Bergen Engines is, among other things, a supplier to Nato member Norway’s navy.
“There is significant uncertainty in relation to national security interests, and this uncertainty must be dealt with,” justice minister Monica Maeland said, adding that the sale must be put on hold for the time being. “We don’t know which conclusion we will draw.”
Any due diligence linked to the sale must also be put on hold as long as the review is continuing, the ministry added.
A spokesperson for RollsRoyce said it alerted the government in the proper way before announcing the sale of Bergen Engines.
“We understand, however, that the Norwegian government now wishes to further investigate the deal and Rolls-Royce will co-operate in any way we can with that review. As requested, we have paused the sales process,” the spokesperson said.
TMH Group did not immediately respond to a request for comment.
While Norway welcomes foreign investment, this must be balanced against potential threats to national security, the justice ministry said.
“The security situation requires us to closely monitor foreign investments in strategic industries,” Maeland said, adding that she plans to give a separate briefing on the matter to parliament.
Bergen Engines makes medium-speed gas and diesel engines for marine and power generation customers and employs about 950 people. It generated revenue of £239m in 2019, Rolls-Royce said when announcing the planned sale.
Rolls-Royce shares were down 0.9% at 12pm GMT, lagging behind a 0.7% rise in the FTSE 100 benchmark index.