Receive $80 Grab vouchers valid for use on all Grab services except GrabHitch and GrabShuttle when you subscribe to BT All-Digital at only $0.99*/month.
Find out more at btsub.sg/promo
[LONDON] The UK government is considering nationalising the nuclear submarine business of Rolls-Royce Holdings PLC, which powers its Trident missile deterrent system, the Financial Times reported.
The government may also decide to merge some or all parts of Rolls Royce's businesses with BAE Systems, the FT said. Rolls Royce's Chief Executive Warren East had ruled out any plans to "sell big chunks" of their business in November amid pressure from activist investor ValueAct for the company to divest its marine engine business and focus on its main aero-engine business.
The company shocked investors four months ago when it said profits from its aero-engine business, its biggest unit which last year accounted for about half of profits and which it is counting on for future growth, would shrink in 2016.
Officials at Prime Minister David Cameron's office are concerned that Rolls Royce's management has no substantial experience of defending itself in the event of a hostile takeover bid, the FT reported, citing people familiar with the matter.
The paper quoted a government spokesperson saying that the company is a "major contributor to the UK economy and is an important supplier of defense equipment to the government." The 131-year-old company that supplies engines to airplanes, ships and for industrial use, issued a fourth profit warning in November as a slowdown in Asia hit demand for servicing older aircraft engines.
Representatives of the UK government, Rolls Royce and BAE Systems could not be reached immediately for comment outside regular business hours.