Rolls-Royce obtains final approval for acquisition of ITP
Rolls-Royce has obtained the approval of all the relevant authorities for the acquisition of the outstanding 53.1% shareholding in Industria de Turbo Propulsores SA (ITP) owned by SENER Grupo de Ingeniería SA (SENER).
Approval from the authorities in Spain paves the way for Rolls-Royce to conclude the acquisition, which was originally announced on 11 July 2016.
ITP is currently the ninth largest aircraft engine and components company in the world by revenue. Ranking among the top one hundred companies in the aerospace industry (Top 100 Aerospace Companies, PwC and Flight International, 2015), the company has production centres in Spain, the United Kingdom, Mexico, the United States, Malta and India, with over 3,000 employees.
ITP includes among its activities the design, research and development, manufacturing and casting, assembly and testing of aeronautical engines. It also provides MRO services for a wide range of engines for regional airlines, business aviation, helicopters, industrial and defence applications.
Creation of ITP came about in 1989 with SENER and Rolls-Royce support. Along with Rolls-Royce, MTU and Avio Aero, ITP - as a shareholder in the European Eurojet consortium - is responsible for the development, manufacturing and maintenance of the EJ200 engine for the Eurofighter Typhoon.
In 2015 Rolls-Royce and ITP entered a strategic collaboration agreement with Rolls-Royce whereby ITP became the supplier of its low-pressure turbines and of the new high speed turbines, plus an agreement with Rolls-Royce to participate in the Trent 7000, the engine for the Airbus A330neo.
On 28 November 2016, Rolls-Royce confirmed the valuation of EUR 720m for the 53.1% shareholding, following due diligence.
Consideration will be settled over a two-year period following completion in eight evenly spaced instalments of equal value.
The agreement with SENER allows flexibility to settle each tranche of the consideration either in cash or in the form of Rolls-Royce shares as preferred by Rolls-Royce. Completion is expected before the end of 2017.