The government of Norway has blocked the sale of Rolls-Royce subsidiary Bergen Engines to Russia's TMH Group on national security grounds, the country's justice minister Monica Maeland has told parliament.
Rolls-Royce
Bergen Engines has been a subsidiary of Rolls-Royce for over 20 years. The company designs and builds maritime engines and supplies the country's navy as well as the global shipping sector.
The blocked sale, which would have included a medium speed engine factory, service workshop and foundry in Norway, with engine and power plant design capability, will come as a blow to Rolls-Royce, which only announced the €150 million deal to the Russian engineering group last month.
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"The central question is whether a sale of this business, which would be controlled from a country with which we don’t have a security co-operation, would represent a risk to national security. The government takes and has taken this very seriously," Maeland said.
The sale of the lossmaking Bergen Engines was part of the aerospace company's attempts to raise a minimum of £2 billion (€2.3 billion) from divestments and disposals by early next year.
Norway, which shares an Arctic border with Russia, had incrementally improved relations with its neighbour until the annexation of Crimea in 2014 triggered tensions.
Since then, both sides have been bolstering their military presence and conducting more military training exercises.
The sale of Bergen Engines was initially only temporarily blocked, on March 9, while the security implications were being assessed.
"We now have sufficient information to conclude that it is necessary to prevent the company from being sold to a group controlled from a country with which we do not have security cooperation," Maeland told parliament.
Also read: Rolls-Royce suffers £4bn loss for 2020
Opposition parties in Norway have criticised the government for being slow to respond to what they considered to be an emerging threat to national security after Rolls-Royce informed authorities of the potential deal with the Russian company late last year.
The day after the March 9 suspension, Russia said that the Norweigian decision was an example of anti-Russian sentiment and was a serious concern.
Last month, Rolls-Royce said that the deal with TMH was part of its covid recovery plan. Bergen Engines employs around 950 people and saw revenues of €270 million in 2019.
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