Bloomberg News

Waertsilae Offers 383 Million Pounds for Engineer Hamworthy

November 23, 2011

(Updates with Waertsilae CEO comment from third paragraph.)

Nov. 22 (Bloomberg) -- Waertsilae Oyj, the world’s biggest maker of ship motors and power plants, agreed to buy U.K. oil and gas engineer Hamworthy Plc for about 383 million pounds ($600 million) as it expands in gas-powered engine production.

Waertsilae offered 825 pence a share in cash, the Helsinki- based company said today in a statement. Gordon Page, chairman of Poole, England-based Hamworthy, said the bid was “attractive.” It’s subject to shareholder approval.

“The reason why we can put such a high price on the table is that we see significant synergies,” Chief Executive Officer Bjoern Rosengren said in a telephone interview. “It’s a very compelling offer.”

The Finnish manufacturer is seeking growth in dual-fuel ship engines that run primarily on liquefied natural gas and can use marine diesel oil or heavy fuel oil as a backup. In August, the company agreed with Royal Dutch Shell Plc on the supply of LNG to operators using Waertsilae’s gas-powered vessels. Waertsilae controls more than 90 percent of the market for LNG ship engines, Rosengren said.

Premium Price

The offer represents a 29 percent premium to Hamworthy’s average share price over the past 20 days. That’s in line with the average premium paid for global oil and gas services deals announced in the past 12 months, according to data compiled by Bloomberg. Waertsilae expects the transaction to close next quarter, pending regulatory approval.

Waertsilae rose the most in a week, increasing as much as 1.7 percent to 21.02 euros and was up 1.4 percent at 10:44 a.m. in Helsinki. Hamworthy added 2.5 percent to 830 pence.

The acquisition will help Waertsilae tap the growing offshore and LNG businesses within shipping, which as an industry is facing “a lot of headwind,” including overcapacity and low rates, Rosengren said. Its gas-powered engines, which can be retrofitted on ships, are also in demand as they help companies meet more stringent environmental regulations, he said.

“Hamworthy is an important part of fulfilling that strategy,” Rosengren said. “This is a good start.”

--With assistance from Diana ben-Aaron in Helsinki. Editors: Amanda Jordan, Stephen Cunningham.

To contact the reporter on this story: Kati Pohjanpalo in Helsinki at kpohjanpalo@bloomberg.net

To contact the editor responsible for this story: Tasneem Brogger at tbrogger@bloomberg.net


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