Norway Halts Sale of Bergen Engines to Russian Conglomerate

bergen engines
A Bergen medium-speed natural gas-fueled engine (Rolls-Royce Power Systems)

Published Mar 10, 2021 11:06 PM by The Maritime Executive

Norway's government has intervened in the planned sale of Rolls-Royce's Bergen Engines division to a Russian conglomerate, citing national security concerns. 

Bergen is a Norwegian firm with more than 165 years of history in the shipping industry, including 75 as a maker of diesel engines. It became part of Rolls-Royce through a series of acquisitions: it was purchased by Ulstein in the 1980s; Ulstein was acquired by Vickers in 1999; and later that year, Vickers was then itself acquired by Rolls-Royce. Bergen Engines has remained a self-contained division with its own product lineup. 

In February, Rolls-Royce said that it would sell Bergen to Russian rail and transport conglomerate Transmashholding (TMH). for $180 million. The decision follows a strategic review and asset disposal process which was first announced in February 2020, and it covers Bergen's medium speed engine factory, service workshop and foundry in Norway; its engine and power plant design capability; and its service network. 

In a statement in February, TMH said that it is interested in Bergen's work in low-emissions power, and that it "intends to develop a long-term strategy based on carbon-neutral applications."

However, Norway's government is concerned about the strategic implications of the sale. Norway is a member of NATO, and its navy and coast guard are dependent upon Bergen Engines' marine powerplants; Russian ownership would be a strategic concern. “If there’s a Russian company owning a Norwegian firm from which we are to receive deliveries, we can’t take such deliveries,” Norwegian chief of defense General Eirik Kristoffersen told TV2. 

TMH is an international engineering giant, but 80 percent of its shares are held by four Russian nationals - mining magnate Iskandar Makhmudov, TMH president Andrey Bokarev, TMH CEO Kirill Lipa and TMH chairman Dmitry Komissarov. 

On Wednesday, Norwegian Defense Minister Frank Bakke-Jensen told NRK that the government is "looking at undesirable transfers of technology and knowledge.” The Norwegian NSM security agency is said to be investigating the details of the transaction. 

This news was not welcomed by the Russian Embassy in Oslo, which told Reuters that the "anti-Russian implication in this [review] causes serious concern."