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Rolls-Royce to sell commercial marine business to Kongsberg for £500M


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Rolls-Royce to sell commercial marine business to Kongsberg for £500M

Rolls-Royce Holdings PLC agreed to sell its commercial marine business to Norway's Kongsberg Gruppen for an enterprise value of £500 million, with net proceeds of about £350 million to £400 million.

The disposal follows the British aircraft engine maker's strategic review of its marine operations in January and is part of efforts to simplify the group's business. The transaction does not include Bergen Engines nor Rolls-Royce's naval business.

The transaction, to be paid on a cash- and debt-free basis, is estimated to close in the first quarter of 2019, subject to regulatory approvals. Kongsberg said it will finance the acquisition through a combination of new equity and a new bond loan.

The Norwegian government, which owns 50% of Kongsberg, will participate in a planned 5.0 billion Norwegian kroner rights issue to help finance the acquisition, pending parliament consent.

Rolls-Royce will use the proceeds to boost its balance sheet and fund other investment initiatives.

As of July 5, US$1 was equivalent to 8.05 Norwegian kroner.