The engine maker said it had reached a deal to supply F130 engines for the US Air Force’s B-52 fleet for the next 30 years. The contract could be worth up to $2.6 billion (£1.9 billion). Parts will be manufactured at Rolls-Royce’s Indianapolis factory, which was recently upgraded at a cost of $600 million.
Tom Bell, chairman and CEO of Rolls-Royce North America, said: “We are proud to join a truly iconic US Air Force program and provide world-class, American-made engines that will power its missions for the next 30 years. The F130 is a proven, efficient, modern engine that is the perfect fit for the B-52.”
Separately, Rolls-Royce said it had agreed the sale of its Spanish turbine manufacturing business ITP Aero for €1.7 billion (£1.45 billion). The business has been bought by a consortium led by Bain Capital Private Equity. Proceeds of the sale will go towards rebuilding Rolls-Royce’s balance sheet, which has been battered by the pandemic.
“Today’s announcement is a significant milestone for our disposal programme as we work to strengthen our balance sheet, in support of our medium-term ambition to return to an investment grade credit profile,” chief executive Warren East said. “This agreement represents an attractive outcome for both Rolls-Royce and ITP Aero.”
East said ITP will remain “a key strategic supplier and partner for decades to come”.
Shares in Rolls-Royce rose 13.3p, or 10%, to 145.8p — the highest level since March 2020.
Shares in Rolls-Royce hit a 17-year-low almost exactly a year ago but the stock has enjoyed better fortunes in recent months thanks to the relaxation of global travel restrictions. Over the weekend it was reported that the UK government is also close to approving funding for a series of mini nuclear reactors built by Rolls-Royce to help address the UK’s energy crisis.
“The clinching of this deal, which could be worth up to $2.6 billion, is yet another ray of sunlight for the engineering firm which finally seems to be leaving the pandemic storm clouds behind,” said Susannah Streeter, an analyst at Hargreaves Lansdown.