Norway blocks Rolls-Royce's assets sale to Russia over 'national security' concern

Norway on Wednesday notified the domestic engine maker Rolls Royce Holdings that it was halting the sales of its Bergen Engines to Russian owned by TMH group due to security implications. Norway's National Security Authority (NSM), a supervisory and protective authority for the government of Norway to counter the threat, notified Rolls Royce that it was examining the planned sale to Russia under the Security Act. 

‘The government has been exploring this issue over the past few months, and it cannot be ruled out that the sale of Bergen Engines AS to TMH Group may pose a risk to national security interests,’ the  National Security Authority (NSM) said in the official release. 

Monica Mæland, Minister of Justice and Public Security, stated that the decision of halting the sale of assets to Russia was taken in order to procure sufficient facts and to enable the assessment of change of ownership. Mæland cited the national security risk that prompted the administration to pause the deal. She stressed that Norway’s National Security Authority (NSM) that operates under the auspices of the Ministry of Justice and Public Security, had stepped in.  

150 million euros ($178 million) deal

Last month, Rolls Royce struck a 150 million euros ($178 million) deal to sell its Bergen Engines AS to a company named TMH Group. It was later found that the firm was co-owned by Russian billionaire Iskandar Makhmudov. The Norwegian government, which has trade embargo against Russia over the Crimea situation in force, questioned the security surrounding the deal alleging transborder corruption.

Rolls Royce, meanwhile, clarified in a statement that it had alerted the Norway government ahead of sealing the agreement for the sale of Bergen Engines. A spokesperson for the firm, Richard Wray told local reporters that now that the Norwegian government wants to investigate the case, Rolls Royce ‘will cooperate’.  Russian firm TMH, which is based out of Moscow says on its official website that it is the ‘biggest seller of rolling stock in Russia and the former Soviet CIS states.’

‘In recent months, the government has thoroughly investigated this matter, and it can’t be ruled out that a sale of Bergen Engines to TMH may entail a risk to national security interests,’ Justice and Public Security Minister Monica Maeland said in a separate statement. ‘The security situation means that we must pay particularly close attention to foreign investment in strategic sectors’, she warned.

‘In cases like this one, there will always be some elements that cannot be discussed publicly. The government is now working to map out all aspects relating to the possible sale of Bergen Engines,’  Mæland said in the NSM's press release.

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