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* Bergen Engines sale halted on security grounds
* Rolls-Royce had planned 150 mln euro sale to Russia's TMH
* Norway fears national security could be at risk
(Adds reactions, background)
By Terje Solsvik
OSLO, March 23 (Reuters) - Norway will block Rolls-Royce
from selling a Norwegian maritime engine maker to a
Russian company on national security grounds, its justice
minister told parliament on Tuesday.
Based on Norway's west coast, and owned by Britain's
Rolls-Royce for more than 20 years, Bergen Engines supplies NATO
member Norway's navy as well as the global shipping industry.
The government on March 9 said it had temporarily suspended
the 150 million euro ($178 million) sale to TMH Group while it
assessed security implications.
"We now have sufficient information to conclude that it is
necessary to prevent the company from being sold to a group
controlled from a country with which we do not have security
cooperation," Justice Minister Monica Maeland of the
centre-right minority government told parliament.
Relations between Norway and Russia, which share a border in
the Arctic, gradually improved in the post-Cold War era before
suffering a setback when Moscow annexed Crimea in 2014.
That triggered more tension in the north with a military
build-up on both sides and more frequent military manoeuvres.
"The technology possessed by Bergen Engines, and the engines
they produce, would have been of significant military strategic
interest to Russia, and would have boosted Russian military
capabilities," the government said in a statement.
The Russian embassy in Oslo said on March 10 that Norway's
decision to suspend the sale showed anti-Russian sentiment and
was of serious concern. The embassy was not immediately
available for comment on Tuesday.
Announcing the planned disposal, Rolls-Royce said last month
the transaction with Russia's TMH was part of the group's
overall plan to overcome the pandemic.
Norwegian opposition parties criticised the government for
being slow to respond to what they said was a national security
threat, after it emerged that Rolls-Royce had informed
authorities of a potential Russian deal late last year.
"The government failed to comprehend the severity,"
Christian Tybring-Gjedde, a lawmaker from the right wing
opposition Progress Party, said.
The case will be the subject of a special hearing in
parliament, said Jette Christensen, a lawmaker from the
opposition Labour Party.
Bergen Engines makes medium-speed gas and diesel engines for
marine and power generation customers. It employs about 950
people and had revenue of 239 million pounds ($332 million) in
2019.
Norway introduced a new security law that year which
strengthening the government's ability to impose conditions or
block foreign acquisitions when vital national interests are at
stake.
While corporate takeovers have been assessed from time to
time, Norway had abstained from blocking any business
transactions since the law came in, the government's NSM
security agency said this month.
($1 = 0.8408 euros)
(Editing by Edmund Blair and Jason Neely)
