RUSSIAN BUYER FOR BERGEN ENGINES

Bergen Engines is the subject of a purchase agreement with TMH International, the Swiss-based affiliate of the TMH organisation, at a price of approximately EUR150 million (£131m). Otherwise known as Transmashholding, the Russian parent is a leading producer of rail rolling stock and locomotives.

The sale, expected to take effect during the second half of 2021, reflects TMH’s strategy of global expansion and selective diversification and Rolls-Royce’s decision to rationalise group operations and divest itself what it regards as “non-core” interests.

Forming part of the business unit Rolls-Royce Power Systems, the Bergen portfolio encompasses gas and diesel engines in the 1,400-11,830kW range, serving power generation and marine applications. The transaction includes the extensively modernised Hordvikneset factory near Bergen and in-house foundry, the engine and power plant design capability, and service network. The company’s long-term relationship with Kongsberg Maritime, as distributor of Bergen engines to the maritime market, will continue under TMH ownership.

Rolls-Royce, whose predominant activity as an aero engine maker has suffered from the crippling effects of Covid-19 on the airline industry, had already announced last February that it was reviewing the future of the medium-speed engine business, inferring disposal. Only a year before, the group off-loaded its commercial marine division to Kongsberg.

Bergen Engines will be operated as a stand-alone business and overseen from Zug in Switzerland by TMH International.

Although the Norwegian manufacturer is not present in rail traction, its particular expertise in lean-burn reciprocating gas engine technology is understood to have been a particular attraction to the Russian group. Bergen’s competences will enable TMH not only to extend its portfolio and market reach, but also assist it in realising low-carbon and zero-carbon solutions over the long-term, for both rail and marine sectors.

Transmashholding entered into a joint venture with Wartsila back in 2010. A key element in the plan was the development and manufacture of a new version of the ‘baby’ in the Wartsila medium-speed line-up, the 20-series engine, with a view to powering shunter locomotives, plus other marine and landside generator applications, at a new factory in Russia. Four years later, the Finnish group sold its 50% stake in the undertaking to Transmashholding, giving the latter wholesale control.