UK BUYER FOR BERGEN ENGINES

Although subject to certain closing conditions, the agreement foresees completion by 31 December this year, and offers continuity at Bergen as a stand-alone operation.

The transaction follows the earlier planned deal whereby the Norwegian division of Rolls-Royce Power Systems was to be purchased by Swiss-based TMH International, an arm of the Russian group Transmashholding. In March, the Norwegian government blocked the takeover, citing national security considerations, given Bergen’s role as a supplier to the Norwegian Navy and other factors.

The Bergen portfolio encompasses medium-speed gas and diesel engines in the 1,400-11,830kW range for marine and stationary applications. The sale to Langley includes the Hordvikneset factory near Bergen, the in-house foundry, design and research capabilities, and global service network.

The move forms just one element of Rolls-Royce’s rationalisation strategy, in which at least £2 billion (US$2.8bn) overall is sought from disposals of what are now regarded as “non-core” interests. Sale proceeds of EUR70m (US$83m), together with the EUR40m (US$47m) in cash currently held within Bergen Engines for retention by Rolls-Royce, will contribute towards the rebuilding of the group’s balance sheet, especially hard hit by the impact of Covid-19 on the airline industry. This is less than the EUR150m (US$177m) that would have been raised by selling to the Transmashholding organisation.

The Bergen operation generated revenues of some EUR200m (US$237m) in 2020, and is expected to achieve EUR260m (US$308m) for 2021. It employs some 900 people worldwide, including 650 at Hordvikneset, where sustained production owes much to the particular and longstanding, home-grown know-how in lean-burn gas engine technology.

Bergen Engines will become part of Langley’s newly-formed Power Solutions Division along with two of its other subsidiaries, the Italian electric motor and generator manufacturer Marelli Motor and the German critical power specialist Piller Power Systems. Bergen’s relationship with Kongsberg Maritime, as distributor of Bergen products to the maritime market, is planned to continue under the new ownership.

Established by chairman and CEO Anthony Langley in 1975, and headquartered in Nottinghamshire, the Langley Group is financially independent and remains under family ownership.

Besides the production of generators and uninterruptible power supply (UPS) systems, the group makes printing presses, welding systems, cement and bulk materials handling equipment, and safety-critical mechanical handling gear. It employs 4,600 people worldwide, mainly in Germany, Italy, France, the UK and USA.