June 22, 2007
Another Røkke shocker
Though there has long been speculation that Norway's Aker ASA was seeking to exit Aker-Kvaerner, a surprise announcement today put paid to the rumors.
Aker, companies related to Sweden's influential and wealthy Wallenbeg family, and the Norwegian Government have entered into agreements that, Aker says, "provide long-term strategic ownership for the Norwegian technology and industrial group Aker Kvaerner."
Norwegian daily Aftenposten put it a little differently, proclaiming that "Norwegian business magnate Kjell Inge Røkke has achieved his plan of forming a Norwegian industrial giant via his Aker group, with the Norwegian state and Swedish participation."
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.
Parallel to the agreements between Aker, Saab, Investor and the Norwegian government, Kjell Inge Røkke has committed to retain control of Aker through his private companies for the duration of the Aker Holding agreement.
Aker says the agreements "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, says Leif-Arne Langøy, Aker Board Chairman and President and CEO. Mr. Langøy 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, says Langøy.
Aker Holding's sole activity is its strategic ownership interest in Aker Kvaerner. The newly established company has no debt. It will control 40.1 percent of Aker Kvaerner shares and voting rights.
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 the 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.
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.
Although Aker ASA sold its interest in Aker Yards earlier this year, it still owns the Aker Philadelphia Shipyard through its Aker American Shipping ASA unit.