Rolls-Royce CEO ends M&A speculation
Shares up as engine maker opts for £1b share buyback
Add BT as a preferred source[LONDON] Rolls-Royce Holdings plc, the second biggest manufacturer of jetliner engines, signalled that it is ready to sit out a boom in industrial mergers, opting instead for a £1 billion (S$2.1 billion) share buyback.
Rolls-Royce shares rose the most in almost two years after chief executive officer John Rishton said that the UK company will use proceeds from the sale of energy assets to Siemens AG to reward shareholders and that "no material acquisitions are planned".
Rolls-Royce said in January that it had failed to buy Waertsilae Oyj, the No 1 maker of marine engines for tankers, cruise vessels and warships, while Daimler AG in April compelled it to buy full control of a diesel engine venture at a cost of 2.43 billion euros (S$4.1 billion). Analysts said that the stock rose because the CEO ended speculation that US$1.3 billion from Siemens could fund a new push for Waertsilae.
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