Aker Kvaerner Announces 'Historic' Ownership Deal

Aker, Wallenberg-related companies, and the Norwegian Government have entered into agreements that provide long-term strategic ownership for the Norwegian technology and industrial group Aker Kvaerner.

Under the agreements, Aker will transfer its 40.1 percent ownership interest in Aker Kvaerner to the newly established company Aker Holding. Aker will hold a controlling, 60 percent stake in Aker Holding. The Norwegian Government will own 30 percent of Aker Holding, the Swedish technology company SAAB will own 7.5 percent, and the Swedish investment company Investor will hold 2.5 percent.

"The agreements are historic. They provide Aker Kvaerner with long-term ownership, in recognition of the company's excellent employees, technologies, competence, and ability to innovate and execute. The commercial and entrepreneurial cooperation among Aker companies will continue. Further, Aker Holding will become a hub for developing new commercial ventures," said Leif-Arne Langoy, Aker Board Chairman and President and CEO. Langoy is also Aker Kvaerner Board Chairman.

Aker will free up some NOK 6.4 billion in assets pursuant to the transaction agreements. The transactions will give the parent company Aker ASA a NOK 5.3 billion accounting gain.

"Aker's Board of Directors will not propose any extraordinary payments to shareholders as a result of the Aker Holding transaction. The funds generated will be retained by Aker. This capital will provide further predictability regarding future dividend payments, in accordance with Aker's established dividend policy. It will also strengthen the company's financial clout for further industrial targeting and innovation," said Langoy.

Transaction description

Aker Holding's sole activity is its strategic ownership interest in Aker Kvaerner. The newly established company has no debt. Aker Holding will own 110 333 615 Aker Kvaerner shares, corresponding to 40.1 percent of Aker Kvaerner shares and voting rights.

Aker Holding's ownership is as follows: Aker, 60 percent; the Norwegian Government through the Ministry of Trade and Industry, 30 percent; SAAB, 7.5 percent; and Investor, 2.5 percent.

The companies owning Aker Holding and the Norwegian government will in practice control the further development of Aker Kvaerner, and will have the power to veto matters. The parties have formally agreed that Aker Kvaerner will continue to be developed as an internationally competitive, major supplier of technology, products, systems, and services, with operations primarily directed at energy, oil, and gas sectors.

Aker Holding's owners will continue the established, close industrial cooperation between Aker Kvaerner and other Aker companies. The owners of Aker Holding will also actively pursue and support the development of new business opportunities among companies in the Aker Group, SAAB, and Investor, provided such prospective commercial ventures do not conflict with the interests of Aker Holding shareholders.

Financial details

In the aforementioned agreements, the valuation of Aker Holding is NOK 16,1 billion, which corresponds to NOK 145,60 per Aker Kvaerner share. The valuation was determined by applying the average quoted price of Aker Kvaerner shares over the past four weeks. Thus, the transaction with Aker Holding frees up NOK 6.4 billion of Aker assets. Further, Aker will receive interest amounting to 4.5 percent p.a. until the date the transaction is formally completed.

The transaction is subject to approval by Norway's national parliament, Stortinget, of the Government's share acquisition in Aker Holding, by end of 2007.

Parallel to the agreements between Aker, Saab, Investor and the Norwegian government, Aker's main shareholder Kjell Inge Rokke has committed to retain control of Aker through his private companies for the duration of the Aker Holding agreement.