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Rolls-Royce to sell diesel parts maker for 700m euros

L'Orange sale part of CEO Warren East's plan to simplify the company's business

Another part of Mr East's plan is the potential sale of Rolls-Royce's loss-making commercial marine business.


BRITAIN'S Rolls-Royce said it had agreed to sell its Germany-based diesel parts maker L'Orange to US-based engineering company Woodward Inc for 700 million euros (S$1.128 billion), as part of a plan to simplify its business.

Rolls CEO Warren East has been trying to streamline the company during his nearly three years in charge as part of a turnaround plan to counter declines in some of its older aero-engine programmes and plunging demand for oil equipment.

The company said on Monday that L'Orange would continue as a key supplier to its power systems business, which makes engines for use in trains, agriculture and mining, under a 15-year agreement.

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"This transaction builds on the actions we have taken over the last two years to simplify our business," Mr East said in a statement.

"The divestiture of L'Orange enables Rolls-Royce Power Systems to focus on other long-term, high growth opportunities and our company to allocate our capital to core technologies and businesses that drive greater returns for the group."

Rolls had announced in January that it was reviewing strategic options for L'Orange.

Another part of Mr East's simplification plan is the potential sale of the company's loss-making commercial marine business, which designs and makes equipment used in oil and gas extraction. That unit is also under review.

Rolls-Royce said in March that it would give an update on that process in May at its annual meeting or in June at an investor day. REUTERS