Rolls-Royce completes restructuring of International Aero Engines collaboration
Friday, 29 June 2012
Rolls-Royce, the global power systems company, confirms that it has today completed the restructuring of its participation in International Aero Engines (IAE) Collaboration, which produces the V2500 engine for the Airbus A320 family of aircraft. Rolls-Royce has sold its equity and programme shares in the IAE Collaboration to Pratt & Whitney, a United Technologies Corp. (NYSE:UTX) company, for a consideration of $1.5 billion. In addition to the consideration, which will be subject to working capital adjustments, Rolls-Royce will also receive an agreed payment for each hour flown by the current installed fleet of V2500-powered aircraft for the next fifteen years.
Rolls-Royce remains committed to IAE and its customers and continues to be an essential supplier, retaining responsibility for the manufacture of high-pressure compressors, fan blades and discs as well as the provision of engineering support and final assembly of 50 per cent of V2500 engines.
As well as restructuring their participation in IAE, on 12 October 2011, Rolls-Royce and Pratt & Whitney also announced the formation of a new engine collaboration to power future mid-size aircraft, which is subject to separate regulatory approvals. IAE partners, Japanese Aero Engines Corporation (JAEC) and MTU Aero Engines GmbH (MTU), have also agreed to join this new venture. This collaboration will draw on the most advanced technology from these world-class companies to drive enhanced performance for this fast growing segment in which worldwide demand for around 20,000 new aircraft (or nearly 45,000 engines) is predicted over the next twenty years.
- As announced on 12 October 2011, the transaction is expected to improve Civil Aerospace’s operating profit by more than £140m in the first 12 months after closing. Thereafter, a slowly diminishing improvement is expected in successive years, depending on the utilisation of the current V2500 fleet. Further detail will be provided at the Rolls-Royce Half-yearly results briefing on 26 July 2012.
- Rolls-Royce is a world-leading provider of power systems and services for use on land, at sea and in the air, and has established a strong position in global markets - civil aerospace, defence aerospace, marine and energy.
- As a result of this strategy, Rolls-Royce has a broad customer base comprising more than 500 airlines, 4,000 corporate and utility aircraft and helicopter operators, 160 armed forces, more than 4,000 marine customers, including 70 navies, and energy customers in more than 80 countries.
- Annual underlying revenues were £11.3 billion in 2011, of which more than half came from the provision of services. The firm and announced order book stood at £62.2 billion at 31 December 2011, providing visibility of future levels of activity.
- Rolls-Royce employs over 40,000 people in offices, manufacturing and service facilities in over 50 countries. Over 11,000 of these employees are engineers.
- In 2011, Rolls-Royce invested £908 million on research and development, two thirds of which had the objective of further improving the environmental performance of its products, in particular reducing emissions.
- Rolls-Royce supports a global network of 28 University Technology Centres, which connect the company’s engineers with the forefront of scientific research.
- The Group has a strong commitment to apprentice and graduate recruitment and to further developing employee skills.
- Since its creation almost thirty years ago IAE has become a major force in international aviation with approximately 5,000 V2500 engines delivered and approximately 2,000 on order.