Aker Kvaerner Sells Subsidiary to Wartsila

Aker Kvaerner has sold the Stord based subsidiary Aker Kvaerner Power and Automation Systems (AKPAS) to the Finnish corporation Wartsila for NOK 110 million. This includes approximately NOK 15 million in net cash holdings. The transaction represents a gain in the order of NOK 90 million compared to Aker Kvaerner's book value. AKPAS supplies power and automation systems to the marine market, the oil and gas market and segments of the industrial market. The two year old company has 135 employees.

With the newly developed, compact and modern frequency transformers as an important part of their range of products, the earlier division of Aker Kvaerner Elektro was established as a separate company from January 1, 2004. During the two years that have passed, the products from Aker Kvaerner Power and Automation Systems have been well received by clients both in the marine market and in the oil and gas market. During 2005 alone, the company has build up an order backlog worth over NOK 600 million, fairly evenly divided between the two market segments.

"AKPAS is a success story with respect to the Aker Kvaerner organization's capabilities for industrial development. We have found that the best way to continue this remarkable development is to find a permanent home for this business, where this range of products and technologies will be part of the core business" says Mr. Torleif Gram, Executive Vice President of Aker Kvaerner's Business Area for Maintenance, Modifications and Operations. He continues, "The sale of Aker Kvaerner Power and Automation Systems is a good example of how we can find good industrial win-win solutions."

There are several winners in the decided model. The clients will get an even more complete range of products. The employees will get a new, large owner who will continue the development of both the employees and the products. The local community of Stord gets another big, international corporation in their industrial flora in addition to Aker Kvaerner. Wartsila takes over a company with a substantial order reserve, a competent workforce and good products which fit into their product portfolio. Aker Kvaerner gets a fair compensation for developing the company.

"As Aker Kvaerner Power and Automation Systems no longer fit into our core activity, I am very satisfied that it will be Wartsila, a corporation of high standing, which will continue the operation of the company. I am convinced that they will carry on the business because AKPAS fit very well into the portfolio of the Wartsila division for marine and offshore solutions," says Mr. Gram.

"A combination of Wartsila's global strength and determination to invest in our field, combined with juvenile vitality will give great opportunities in the years to come," says Mr. Arne Birkeland, President of Aker Kvaerner Power and Automation Systems. The representatives of the trade unions are jointly backing what is about to happen, and this contributes to the positive effect of the change of ownership.

"From our point of view Wartsila represents great possibilities for further development of what we have started. They have a great market network, advanced technology and have made it their business to have good products and systems to supply to our core markets: the oil and gas market - plus the marine market," concludes Mr. Birkeland.