KONGSBERG has entered into an agreement with the Finnish state for the purchase of 49.9 % of the shares in Patria for EUR 272 million. Patria is Finland’s leading defense supplier and owns 50 % of the shares in the Norwegian company Nammo.
The partnership will be a leading defense supplier in the Nordics, and a considerable supplier on the European defense market, with total gross revenues of NOK 13.4 billion in 2015.
“By forming this industry partnership consisting of KONGSBERG, Patria and Nammo, we’re taking a proactive step to meet the ongoing consolidation in the defense industry. This transaction entails a significant strengthening of our Nordic and international position, it provides strengthened profitability and growth opportunities, and is an important step in the strategy for our defense businesses”, said Walter Qvam, CEO of KONGSBERG.
Patria has approximately 2,800 employees and had revenues of EUR 428 million (NOK 3.8 billion) in 2015. The company is Finland’s leading defense supplier, and has a broad and modern product portfolio.
The Norwegian state and Patria each holds a 50 % share in Nammo. Nammo has approximately 2,200 employees and had revenues of NOK 3.8 billion in 2015. The company develops and produces high technology products within ammunition and rocket engines for defense and civilian applications.
“As a partnership, KONGSBERG, Patria and Nammo hold both complementary and world leading products as well as key geographic areas that strengthen each other. This, combined with Patria’s strong position in Finland and KONGSBERG’s strong global alliances and position in Norway, makes us significantly stronger together in a growing global defense market”, Qvam added.
“This partnership will be a larger and stronger supplier to the Norwegian and Finnish armed forces with more than 7,000 employees and total gross revenues of 13.4 billion Norwegian kroner. We have a close cooperation today, including on air defense and missiles, and this cooperation will be strengthened further. Significant opportunities within other areas, such as maintenance and aviation, will also emerge”, Qvam concluded.
The completion of the transaction is expected in the second quarter of 2016, and is subject to normal closing conditions e.g. approval from relevant authorities. The purchase price plus settlement of interest and taxes at closing will be settled in cash, and financed by a bridge facility in DNB.