Rolls-Royce To Sell IAE Share to Pratt & Whitney

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IAE V2500 engine
Rolls-Royce will continue to support and manufacture parts for the IAE V2500 engine, despite its planned divestiture of its share in the joint venture with Pratt & Whitney.
October 12, 2011, 5:38 PM

Rolls-Royce plans to sell its equity and program shares in IAE to Pratt & Whitney for $1.5 billion as part of a restructuring that would see the two companies enter a new partnership to develop an engine to power a future midsize aircraft. Under the proposed deal, the companies would collaborate on high-bypass-ratio geared turbofan technology as well as studies for so-called next-generation propulsion systems, including advanced geared engines and open-rotor technology. Rolls-Royce has also agreed to make a “modest” investment in the PurePower PW1100G geared turbofan for the Airbus A320neo.

The proposed contract calls for Rolls-Royce to receive an agreed payment for each hour flown by the current installed fleet of IAE V2500-powered aircraft for 15 years from completion of the transaction. Meanwhile, Pratt & Whitney intends to offer Rolls-Royce’s share in IAE to the joint venture’s other partners—MTU Aero Engines and Japanese Aero Engines Corp. (JAEC). Rolls-Royce will continue to carry 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 percent of V2500 engines.

The transactions stand subject to various closing conditions, including regulatory approvals.

 

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