British engine maker Rolls-Royce announced on Friday it has agreed to sell its troubled commercial marine business to Norwegian industrial group Kongsberg for £500 million.
The deal, worth $661 million or 566 million euros, is part of a massive overhaul led by chief executive Warren East, Rolls-Royce said in a statement.
The news comes three weeks after the London-listed company launched plans to axe 4,600 mainly British management roles by 2020 to further slash costs. The commercial marine division employs about 3,600 staff mainly in the Nordic region, reports BSS.
Rolls-Royce expects net proceeds of o350 million to o400 million from the transaction, which will conclude early next year. East has overseen a drastic restructuring since his appointment as chief executive in 2015.
“This transaction builds on the actions we have taken over the last two years to simplify our business,” he said in a company statement.
“The sale of our commercial marine business will enable us to focus on our three core businesses and on meeting the vital power needs of our customers.”
The company had in January launched a strategic review of the division, which generated 2017 revenues of £817 million but an operating loss of £70 million.
Rolls-Royce, whose engines are used in Airbus and Boeing aircraft, has 16,000 staff at its main UK operational base in Derby in central England. The group currently employs about 55,000 staff worldwide.
Kongsberg, which has operations in 25 countries and 7,000 staff, provides products to sectors including defence, oil and gas and aerospace.