Rolls-Royce Holdings PLC (LSE:RR.) has agreed to sell its Bergen Engines subsidiary to industrial conglomerate Langley Holdings for an enterprise value of €63m.
Sale proceeds are €70mln with €40m of cash currently held within Bergen Engines to be retained by Rolls-Royce.
The sale covers the Bergen Engines factory, service workshop and foundry in Norway; engine and power plant design capability; and a global service network.
Bergen, which employs more than 900 people worldwide, including 650 in the main factory in Hordvikneset, generated revenues of around €200mln in 2020.
Approval is being sought from the Norwegian government, said Rolls-Royce. The Norwegians blocked a deal to sell Bergen to Russian group TMH earlier this year on national security grounds.
Langley is headquartered in the UK and also has operations in Germany, Italy, France and a substantial presence in the US. It already supplies mechanical handling equipment for the Ministry of Defence's submarine missile loading facility at Coulport, Scotland.
READ: Rolls-Royce sale of Bergen Engines blocked on security grounds
Bergen Engines' long-term relationship with Kongsberg Maritime, distributor of Bergen medium-speed engines to the maritime market, is planned to continue as is, said the Rolls statement.
Warren East, Rolls-Royce chief executive, added: “The sale of Bergen Engines is a part of our ongoing portfolio management to create a simpler, more focused group and contributes towards our target to generate at least £2bn from disposals, as announced last year."
Anthony Langley, chairman and CEO of Langley Holdings, said: "We are very pleased to have reached this agreement with Rolls-Royce. The acquisition of Bergen Engines is a strategic step in the development of our power solutions division.”
Rolls put the Bergen business up for sale again in May as part of a disposal programme designed to raise £2bn.
Talks are underway to sell its ITP Aero business and also its stake in Air Tanker to help generate funds to tide it over the slump in civil aviation caused by Covid-19.
Rolls-Royce posted a loss of £4bn in the year to March and was forced to raised £5bn through a combination of loans and equity alongside 7,000 job cuts.
Mini-nuclear reactors moving ahead
Separately a report today said that a consortium led by Rolls-Royce has raised the £210mln required to secure government backing for a mini-nuclear reactor (SMR) development programme.
Rolls believes the project could create 40,000 new jobs in regions by 2050, with plans to install at least 16 plants at existing and former nuclear sites.
Tom Greatrex, chief executive of the Nuclear Industry Association, said: “This is very positive news for the UK nuclear industry. SMRs must play a critical role in our clean energy transition and can open new export markets worth billions of pounds."
Each plant is expected to cost between £1.8b-£2.2bn.
The UK SMR consortium includes the National Nuclear Laboratory and Laing O’Rourke, the construction firm.