GENEVA: Kongsberg Gruppen ASA agreed to buy a marine business from Rolls-Royce Holdings Plc for 500 million pounds (US$660 million), as the Norwegian aerospace company expands into technology for ships.
The acquisition will be partly financed by a rights issue of 5 billion kroner (US$620 million), Kongsberg said in a statement Friday. The Norwegian government, which owns 50% of the company, has said it will take part in the rights issue, pending parliament consent.
For its part, Rolls-Royce has been evaluating options for the unit since January as Chief Executive Officer Warren East reboots of the struggling UK industrial giant. It’s already cut thousands of jobs and closed sites at the division, which has battled with falling demand from the offshore oil industry.
Rolls Royce said it expects net proceeds of about 350 million pounds to 400 million pounds from the deal.
Kongsberg said it expects to conclude the rights issue in the fourth quarter of 2018 and the acquisition early next year. The supplier to the oil and gas industry will adjust the final purchase price based on its cash, debt and working capital when it concludes the deal, which doesn’t include Bergen Engines nor Rolls-Royce’s naval business.
Arctic Securities is Kongsberg’s financial adviser, while Thommessen is giving legal advice and Arkwright and PwC due diligence services.