US-based aerospace manufacturer Pratt & Whitney, a subsidiary of United Technologies Corporation, is buying Rolls Royce Holding Plc's stake in the International Aero Engines (IAE) consortium, a producer of engines for Airbus A320 plane family, for $1.5 billion.
Under the terms of the agreement, Rolls-Royce will sell its equity and programme shares in IAE to Pratt & Whitney for $1.5 billion and offer of a portion of the stake to its IAE partners, MTU Aero Engines AG (MTU) and Japanese Aero Engines Corporation (JAEC).
In addition, UK-based Rolls-Royce will receive an agreed payment for each hour flown by the current installed fleet of V2500-powered aircraft for 15 years from the date of completion of the transaction.
Rolls-Royce has committed to IAE and its customers that it would continue to manufacture high-pressure compressors, fan blades and discs as well as provide engineering support and final assembly of 50 per cent of V2500 engines.
Since its inception almost 30 years ago IAE has become a major force in international aviation with approximately 4,500 V2500 engines in service and approximately 2,000 on order.
Pratt & Whitney and Rolls-Royce also announced an agreement to form a new partnership to power future mid-size aircraft, 120 – 230 passenger aircraft.