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Norway Blocks Rolls-Royce's Planned Sale Of Bergen Engines To Russia's TMH Over Security Concerns

Norway has suspended planned sale by Rolls-Royce Holdings plc. (RYCEF.PK,RR.L,RYCEY.PK) of a Norwegian maritime engine maker Bergen Engines to a Russian-controlled company, TMH , due to the national security concerns.

Rolls-Royce said last month that it agreed to sell the Bergen Engines medium speed gas and diesel engines business to TMH International, the international branch of TMH Group, for about 150 million euros. TMH Group, based in Russia, is a engineering company in rail transport technologies and the world's fourth largest supplier of rail rolling stock.

Norway's Justice and Public Security Ministry said Tuesday, "It is absolutely necessary to prevent the company from being sold to a company controlled from a country with which we do not have a security cooperation."

The Ministry also said that the government believes that national security interests may be threatened if the ownership of Bergen Engines is transferred from Rolls-Royce to TMH. A proposed resolution to stop the sale will be submitted for the King in council on Friday, 26 March 2021.

Meanwhile, Rolls-Royce said that it awaits formal legal notification from the Norwegian Government.

The company noted that it followed the appropriate process in contacting the authorities in advance of the announcement of the sale on 4 February 2021.

Rolls-Royce said it has co-operated with the Government's subsequent review by pausing the sales process and believed it had identified a new owner willing to invest in the business and its people for the long-term.

Rolls-Royce stated that the Norwegian Government's announcement will cause significant uncertainty in Bergen Engines, which employs more than 900 people worldwide including 650 in the main factory in Hordvikneset.

The company will seek the assistance of the Norwegian Government to swiftly find another option, which can provide Bergen Engines and its people with the investment required for the future and Rolls-Royce with an appropriate outcome.

The company remains committed to its target, as set out originally on 27 August 2020, to raise at least 2 billion pounds from disposals by early 2022.

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