Wärtsilä has announced that it will divest its shares in the Qingdao Qiyao Wärtsilä MHI Linshan Marine Diesel Co (QMD), the joint venture company established for manufacturing large low-speed marine diesel engines. Wärtsilä's shares in the joint venture will be transferred to the current majority shareholder, Qingdao Qiyao Linshan Power Development Co, a company fully owned by China Shipbuilding Industry Corporation. The agreement was signed today in Beijing, China.
"The value of the transaction is not significant. The deal will have a positive effect on Wärtsilä's continuing operations but the impact is not significant. The closing of the transaction is subject to the required regulatory approvals," the company said in a statement.
The divestment comes as a result of the announcement made on July 18th 2014 regarding Wärtsilä and China State Shipbuilding Corporation (CSSC) joining forces to establish a new joint venture, which will take over Wärtsilä's 2-stroke engine business. Through this agreement, CSSC will own 70% of the business through its affiliate CSSC Investment and Development Co. Ltd, while Wärtsilä will hold a 30% ownership position. The parties will co-operate in 2-stroke engine technology, marketing, sales, and service activities. In this new context, the 2-stroke business currently owned by Wärtsilä will focus on its core activities, including technology development, licensing, product management as well as sales and marketing of 2-stroke engines. Manufacturing will be delegated entirely to licensees.
"The move to divest manufacturing assets will free up resources and increase our emphasis on accelerating the development of new engines and advanced technologies. In particular, Wärtsilä's unique low-pressure dual-fuel two-stroke engine development, the further expansion of the environmentally friendly Generation X -engines, as well as emission reduction technologies will benefit from this increased focus," says Martin Wernli, Vice President, Wärtsilä Ship Power, 2-stroke and Managing Director, Wärtsilä Switzerland.
QMD will continue to manufacture Wärtsilä low-speed marine engines under license from Wärtsilä via the new joint venture with CSSC. The currently valid license agreement will not be affected by the transaction.