The £500m deal with Kongsberg of Norway will affect 3,600 staff, mostly in the Nordic region, and close in the first quarter of 2019.
The move inlcudes Rolls-Royce’s Ship Intelligence activities, which have seen the rapid development of technologies to enable remote and autonomous operation of commercial vessels, alongside the propulsion, deck machinery and automation and control businesses. The copany had designed a range of autonomous ships ready for changes to regulations in 2020. It has also developed complex control systems to guide shipping remotely into harbour via cellular links.
“This deal comes 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,” said Mikael Makinen, Rolls-Royce President, Commercial Marine. “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. “We will now work closely with KONGSBERG as we go through the transition in the months ahead. I would like to pay tribute to the 3,600 Commercial Marine employees who have maintained absolute focus on their day jobs, winning business and maintaining the levels of support our customers expect.”
Kongsberg will, through a trading arrangement, continue to have access to products from Bergen Engines, which remains part of Rolls-Royce Power Systems that supplies both diesel and gas medium-speed engines. Kongsberg will also be an important partner and supplier to Rolls-Royce’s Defence business for the supply of commercial marine systems used on Naval vessels.
“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. With this acquisition we will strengthen our strategic position with shipowners, shipyards and other customers and partners,” said Geir Håøy, Chief Executive and President of Kongsberg.
In 2017 the Commercial Marine business generated revenue of £817m with an operating loss of £70m. “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,” said Warren East, Chief Executive of Rolls-Royce and former chief executive of chip designer ARM.