Norway blocks Rolls-Royce's plan to sell engine maker to Russia

OSLO (Reuters) – Norway will prohibit the planned sale by Britain’s Rolls-Royce of a Norwegian maritime engine maker to a Russian company on national security grounds, the Nordic country’s justice minister told parliament on Tuesday.

Based on Norway’s west coast, and owned by Rolls-Royce for more than 20 years, Bergen Engines is a supplier to NATO member Norway’s navy as well as to the global shipping industry.

The Norwegian government on March 9 said it had temporarily suspended the 150 million euro ($178 million) sale of Bergen Engines to TMH Group while it assessed security implications.

“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,” Justice Minister Monica Maeland of the centre-right minority government told parliament on Tuesday.

Relations between Norway and Russia, which share a border in the Arctic, gradually improved in the post-Cold War era before suffering a setback when Moscow annexed Crimea in 2014.

That triggered more tension in the north with a military build-up on both sides and more frequent military manoeuvres.

The Russian embassy in Oslo said on March 10 that Norway’s decision to suspend the sale showed anti-Russian sentiment and was of serious concern.

Announcing the planned disposal, Rolls-Royce said last month the transaction with Russia’s TMH was part of the group’s overall plan to overcome the COVID-19 pandemic.

Norwegian opposition parties have criticised the government for being slow to respond to what they said was a national security threat, after it emerged that Rolls-Royce had informed authorities of a potential Russian deal late last year.

“The technology posessed by Bergen Engines, and the engines they produce, would have been of significant military strategic interest to Russia, and would have boosted Russian military capabilities,” the Norwegian government said in a statement.

Bergen Engines makes medium-speed gas and diesel engines for marine and power generation customers. It employs about 950 people and had revenue of 239 million pounds ($332 million) in 2019.

($1 = 0.8408 euros)

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