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© Kongsberg Electronics Production | September 11, 2017

Kongsberg to merge its defence businesses

In a bid to o strengthen its competitive edge in the defence market, the Kongsberg Group merges its two defence areas.
With the new business area, Kongsberg Defence & Aerospace, the group aims to further strengthen its position in a growing defence market, the company says in a press release.

The merger will result in a more integrated, coordinated and strong defence unit ensuring value and growth through delivering advanced defence technology to customers and partners. The new business area will be operational from the first of October, 2017.

“Our solid positions within defence have over time been confirmed, and we are facing considerable opportunities in the defence market, whilst at the same time experiencing increased competition. By merging our two defence areas we will ensure a more effective and coordinated utilization of our joint resources, both in sales and marketing, and within product development and production. A strong and well-coordinated sales and marketing function is key to win important programs that will be driving the group’s value creation going forward,” says Geir Håøy, President and CEO of Kongsberg.

Kongsberg Protech Systems had revenues of NOK 2.1 billion (EUR 225.5 million) in 2016. The business area supply solutions for remote weapon stations, but demand is currently at lower levels than before, and new, larger contract opportunities are somewhat further ahead, the company writes in the press release.

Kongsberg Defence Systems’ revenues were NOK 4.3 billion (EUR 461.75 million) in 2016. The business area is well positioned within its niches, and the international interest for several of the area’s products is considerable.

The merger will entail Kongsberg Protech Systems being integrated as a division in line with the five existing divisions of Kongsberg Defence Systems. Eirik Lie, currently President of Kongsberg Defence Systems, will be President of Kongsberg Defence & Aerospace.

“We continuously have to ensure an effective utilization of our resources to ensure further growth and profitability. A joint defence business strengthens our position for the opportunities ahead of us,” says Håøy.

Following the merger, the new business area will adjust its capacity within certain functions and obtain other efficiency synergies, expected to give total annual cost reductions of approximately NOK 100 million (EUR 10.73 million) from 2018.

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November 14 2017 8:30 PM V8.8.9-1