Vickers’ £300m acquisition of Norwegian marine engineering group Ulstein Holdings will significantly reposition the company.
Vickers, which has suffered setbacks in its defence operations this year, disclosed last week it was talking to Ulstein. This signals the group’s wish to switch the main focus of its business into the marine propulsion sector.
The move follows months of uncertainty after Vickers lost out in its bid to develop the pan-European multi-role armoured vehicle, the so-called battlefield taxi.
Analysts have questioned Vickers’ ability to remain a key player in the land defence systems market once existing orders for the Challenger 2 tank dry up.
The Ulstein acquisition represents a relative downgrading in importance of Vickers’s defence business, which has undergone a radical restructuring, with the closure of its tank factory in Leeds among a raft of measures that will cut 1,136 jobs this year.
The acquisition of Ulstein, which is valued at about £120m, does not include the Norwegian company’s shipbuilding division, but does include Ulstein’s propulsion, engines and steering-gear businesses.
The acquisition is being partly paid for using the £200m of spare cash the group earned from the sale of Rolls-Royce to Volkswagen earlier this year.