May 13, 2021:
In early 2021 Norway blocked British firm Rolls-Royce from selling Bergen Engines, a Norwegian firm Rolls Royce bought in the 1990s. Rolls-Royce kept Bergen Engines in Norway, where it was a major producer of maritime engines. A Norwegian court backed the ban of the sale that would provide Rolls-Royce with $178 million of the $2.7 billion it was seeking to obtain by selling off assets to help it survive the covid19 recession that had reduced its sales and threatened the entire firm.
The Bergen Engine was to be sold to TMH Group, a Russian controlled holding company based in Switzerland. Why did the Russians want this Norwegian firm? Bergin Engine had sales of $333 million in 2019 and is a major supplier of naval engines to Norway and other NATO nations. While Norway has a law that blocks such “national security” sales, that law cannot block the sale indefinitely and the best solution is to arrange a sale to a Norwegian or other NATO country firm.
Russia have been seeking to purchase Western marine engine manufacturers to make up for what it lost when it went to war with Ukraine in 2014. That deprived Russia of its major source of maritime and helicopter engines that had long come from Ukraine based firms. This began during the Cold War when Ukraine was part of the Soviet Union but became independent after 1991 when the Soviet Union fell apart.
At the same time the Bergen Engine sale was blocked, Ukraine ended Chinese majority ownership of Motor Sich, a major and profitable Ukrainian defense manufacturer of aircraft jet engines and gas turbine engines for helicopters and ships. Ukraine will, in effect, nationalize Motor Sich. While this annoys China, it will also please the United States, a major ally and supporter of Ukraine in its fight against Russian invaders. The Americans had recently sanctioned the Chinese firms that were buying a majority interest in Motor Sich. The Americans feared that control of Motor Sich would enable China to solve its problems with developing and manufacturing high-performance jet, helicopter and marine gas turbine engines. Back in 2019 China went forward with its efforts to buy this majority stake. Many Ukrainians felt China would take advantage of their corrupt government and industry officials associated with firms like Motor Sich to get better deals. These were often at the expense of Ukraine but very lucrative for the corrupt Ukrainians involved. Many Ukrainians, and Americans, realized how China operated in deals like this. If China obtained a major, or majority, stake in Motor Sich they could, and probably would, steal all the technology and manufacturing secrets and eventually move Motor Sich production to China. Initially they would hire some Ukrainian tech experts to help the Chinese manufacturing operation to get up to speed, but Motor Sich in Ukraine would become a branch of the main operation in China. Eventually the Ukrainian branch would be the renamed to something Chinese and “Motor Sich” would disappear. Most Ukrainians want to keep Motor Sich Ukrainian and not plundered of all its tech by the Chinese. Norway saw Russia attempting to do the same thing to Bergen Engines.