Rolls-Royce buys up fuel injection expertise
Rolls-Royce and its subsidiary Woodward Inc have signed an agreement for the acquisition of L’Orange GmbH and its related operations located in Germany, the US and China.
The deal worth around €700 million (US$859 million), is all part of Woodward’s acquisition strategy to invest in markets with solid long-term fundamentals, bolster relationships with key customers and enhance the profitability its market segment.
“This transaction builds on the actions we have taken over the last two years to simplify our business,” said Warren East, CEO of Rolls-Royce.
“The divestiture of L’Orange enables Rolls-Royce Power Systems to focus on other long term, high growth opportunities and allocate our capital to core technologies and businesses that drive greater returns for the group.”
L’Orange serves some of the world’s largest specialist diesel engine manufacturers, including Rolls-Royce Power Systems, MTU Friedrichshafen and Bergen Engines, in addition to other low to high speed engine builders.
The company will be renamed Woodward L’Orange going forward and will be integrated into Woodward’s Industrial segment.
The acquisition will establish Woodward as a premier technology and system provider of engine control systems to the industrial engine market.
L’Orange will remain an important partner and supplier for MTU and Bergen in the future through long-term supply agreements, with an initial term of 15 years.
Rolls-Royce confirmed in January 2018 that it was reviewing its strategic options for L’Orange.
The transaction is expected to close by the end of the second quarter of 2018, subject to clearance from the German antitrust authorities.
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