Mr Rokke has won the battle for Kvaerner

Kvaerner, which was suffering a serious cash crunch that would have brought it to its knees by the end of this week, had repeatedly called on Mr Rokke to bail it out, but his refusal to step in without being properly rewarded had been consistent.

Snubbed by the Kvaerner board, Mr Rokke instead decided to double Aker Maritime's stake in Kvaerner to about 25% a week ago - at a time when the share price was extremely low - significantly boosting his bargaining power in the process.

Yukos withdraws

"Kvaerner and... Aker Maritime have reached agreement on an overall industrial and financial solution for the Kvaerner group," the two firms said in a joint statement.

The solution means that Kvaerner will raise at least 2bn (�157m; $222m) and up to 3bn Norwegian kroner through a fresh share issue.

Mr Lund expects the deal to be completed by March 2002

It is not yet clear whether the cost cutting will involve job cuts.

The deal "will create a new strong actor in the oil and gas business, with a considerable potential for international growth," the companies said.

Aker Maritime will own about 50% of Kvaerner once the deal, which values Aker at 3.6bn kroner including 800m kroner debts, is completed.

Under the deal, about 60-70% of Aker's assets will become part of new Kvaerner, with the rest being retained as Aker Maritime.

Kvaerner's other main shareholder, Yukos, which has a 22% stake in the company, withdrew its own bailout offer after it was spurned by Aker shareholders as being too cheap.

The merger proposal, which included plans to reschedule Kvaerner's debts, soon received the backing of several of its main creditors who were eager to avert a collapse of the industrial group.

Shares rocket

Kvaerner shares rose 40% by lunchtime in Oslo.

Aker Maritime's deputy chairman Helge Lund said he expected the European Commission to accept the merger in February, in which case the deal should be completed by March.