Norway to Block Sale of Rolls Royce Subsidiary, Bergen Engines to Russian Group

The Norwegian government has decided to  block the potential sale of Norway- registered Bergen Engines AG, a part of the Rolls Royce group, to the Russia based Transmashholding.

The Minister of Justice and Public Security of Norway, Monica Meland, speaking at a hearing in the Norwegian parliament, Storting, said on March 23, "the sale would strengthen Russia's military capabilities in a way that would clearly be contrary to the security interests of Norway and its allies," Meland said.

Rolls Royce had said last month that the deal with the Russian TMH Group (Transmashholding) was part of its plan to deal with the aftermath of the pandemic. The Norwegian opposition has since criticized the government for its slow response to the acquisition deal.

Her statement said, “Rolls-Royce plc (Rolls-Royce) had notified the Norwegian authorities on 15 December 2020 that the group would initiate a process of selling the Norwegian-registered company Bergen Engines AS (Bergen Engines). The notice stated that Transmashholding Group (TMH Group) was one of the potential buyers. It was further stated that the actual purchase will be carried out by TMH International AG (TMHI), a Swiss-registered company that is 100% owned by the Russian-registered TMH Group. Bergen Engines is a manufacturer and supplier of e.g. engines and generators for both civilian and military side in Norway and several allied countries, including the United States.”

Giving reasons for blocking the sale, Meland said:

• • Our assessment is that the technology Bergen Engines possesses and the engines they produce would have had great military strategic significance for Russia, and it would have strengthened Russia's military capabilities in a way that would clearly be contrary to Norwegian and allied security policy interests.
  • Although these are products and technologies that are not covered by the export control lists, Russia has had significant challenges in gaining access to them since the Western sanctions against the country were introduced in 2014.
  • The planned acquisition could lead to attempts to circumvent the export control regulations or our restrictive measures against Russia, in order to gain access to knowledge and technology of great military strategic importance to Russia in a covert manner.
  • Exporting the technology and engines to Russia would be contrary to Norwegian and allied security policy interests.
  • In addition, it can also be mentioned that a sale of Bergen Engines would also come with a large property with a significant building stock. The strategic location, towards the northern entrance to Bergen and defense installations of security significance for Norway and allied nations, is also a significant factor in the case.