Babcock Buys UK’s Only Dockyard for Nuclear Subs
KBR (51% owner), the Weir Group, and Balfour Beatty have all agreed to sell their interests in Devonport Management Limited (DML) to Babcock International Group plc for total proceeds of GBP 350 million (currently about $695 million). KBR’s ownership in DML is 51%. The transaction is expected to close within 60 days, subject to customary closing conditions including Babcock shareholder approval. DML, through its subsidiary Devonport Royal Dockyard, is the primary dockyard performing refueling and related maintenance for the UK’s nuclear submarine fleet.
KBR’s Chairman, President and CEO William P. Utt said that “Long-term involvement in DML is not core to KBR’s strategy and a sale on the terms agreed represents excellent value for our shareholders.” their release also cited Britain’s Defence Industrial Strategy, whose tenets of “through life support” push suppliers to consolidate integrated design, construction, operation, and maintenance activities. Indeed, the ministry explicitly expected to consolidate the primary dockyards in the UK to reduce costs, even as it moves to downsize the future submarine fleet and introduce a the new Astute Class attack submarine that (like the USA’s SSN-21 Seawolf and SSN-774 Virginia Class boats) does not require nuclear refueling during its service life.
DML has also diversified into other business lines that include non-submarine activity such as warship support, private yacht design and construction, military vehicle assembly and other heavy equipment maintenance activities. These non-retrofit and refueling activities now account for approximately 50% of DML’s revenues. Babcock release | KBR release