Business | Oil & Gas
Rolls-Royce expands into oil industry
Rolls-Royce Group Plc, the second-biggest maker of aircraft engines, has agreed to buy a 33 per cent stake in ODIM, a Norwegian manufacturer of cable-handling gear for the oil industry, to bolster sales outside aviation.
- Bloomberg
- Published: 23:16 June 29, 2009
London: Rolls-Royce Group Plc, the second-biggest maker of aircraft engines, has agreed to buy a 33 per cent stake in ODIM, a Norwegian manufacturer of cable-handling gear for the oil industry, to bolster sales outside aviation.
The UK manufacturer will acquire 15.5 million ODIM shares at 45 crowns each (Dh25.75) from Aker Solutions, giving a total purchase price of about 700 million crowns, it said in a statement on Monday.
Rolls-Royce is expanding in ship design and naval turbines as the slump in global air travel hurts sales of jetliner engines, the London-based manufacturer's biggest market. The marine division already employs 8,000 people and the investment in ODIM will add a specialist in automated handling systems and winches used on offshore and military vessels.
"ODIM has a strong market position and a good product and service portfolio with significant long-term prospects," John Paterson, president of Rolls-Royce's marine division, said in the statement. "The offshore sector is core to our marine strategy."
Rolls-Royce was trading up 0.4 per cent at 354.5 pence as of 8.38am in London yesterday morning. The stock has gained 8.2 per cent this year, valuing the company at £1.85 billion (Dh11.22 billion.)
Following the investment, Rolls will be able to provide customers with a broader product offering, including ODIM's equipment for seismic and sub-sea applications, it said.
The company will make an additional payment to Aker Solutions, Norway's largest engineering company, if within nine months of completion of the agreement it buys further ODIM shares or makes an offer at more than 45 crowns a share.
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