Norway Permanently Blocks Sale of Bergen Engines to Russian Company

Bergen engine
File image courtesy Rolls-Royce

Published Mar 23, 2021 4:14 PM by The Maritime Executive

The Norwegian government has finalized its decision to block the sale of Rolls Royce-owned diesel builder Bergen Engines to a Russian railroad company.

In February, Rolls-Royce said that it had reached a deal to sell Bergen Engines to Russian rail and transport conglomerate Transmashholding (TMH) for $180 million. The agreement was a part of Rolls-Royce's yearlong strategic review and asset disposal process, and it covered Bergen's engineering department, engine factory, workshop and foundry in Norway. In a statement in February, TMH said that it was interested in Bergen's work in low-emissions power and would seek "to develop a long-term strategy based on carbon-neutral applications."

Norway is a member of NATO, and its navy and coast guard are dependent upon Bergen Engines' marine powerplants; according to Norwegian defense authorities, 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. 

On Tuesday, Norway's justice minister informed the parliament that a rarely-used national security law would be invoked to permanently block the sale. “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,” said Justice Minister Monica Maeland.

In a statement, Rolls-Royce called on the Norwegian government to help find a new buyer for Bergen Engines and secure a future for the division's employees. It said that it does not intend to retain the business.

Bergen Engines CEO Jon Arne Røv told public broadcaster NRK that Bergen would immediately begin to look for a new buyer.  "There are large, long processes, but we are quite convinced to manage it," he said. 

"We have great compassion for the [Bergen] employees," said Transmashholding in a statement. "Our goal was to strengthen Bergen Engines by opening new markets, developing new products and securing high-tech jobs in Norway."