UPDATE 2-Finland's Wartsila buys Norwegian ship design firm

(Adds details, quotes; updates share price)

HELSINKI, July 3 (Reuters) - Finnish engineering group Wartsila (WRT1V.HE) has bought Norwegian ship design firm Vik-Sandvik for up to 170 million euros ($268.3 million) to boost its competitive position, Wartsila said on Thursday.

The deal consists of an initial 132 million euros plus a performance-linked payment of up to 38 million, Wartsila, the marine engine builder, said.

"Wartsila's goal is to become the leading provider of ship design services in various segments," Wartsila said.

The extra payment for the Sandvik family-owned firm based in Fitjar, western Norway, will be based on performance of the business over the next three years, Wartsila said.

"In 2007, Vik-Sandvik's turnover was 55 million euros and the profitability is on a very good level," it said, adding that the company has 410 employees.

The acquisition is subject to regulatory approvals, which are expected during the third quarter of 2008, Wartsila said.

Wartsila's shares fell 2.5 percent to 39.18 euros by 0751 GMT, while the Helsinki bourse fell 2 percent.

"From a strategic point of view, the acquisition of Vik-Sandvik is a very important step for Wartsila as it brings us closer to our customers, both ship owners and ship yards," Group Vice President Jaakko Eskola said in the statement.