Rolls-Royce completes restructuring of IAE Collaboration
Jul 02, 2012 12:00 am
Aircraft, Engines & Components
Rolls-Royce has confirmed that it has 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 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 12th, 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.
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 26th, July 2012.