Rolls-Royce looks at selling off its commercial marine division

Rolls-Royce continues to pull back from the merchant marine sector, hinting Wednesday that it might look to hive off the sector.

Yesterday it announced that it is embarking on a further “simplification” of its business, including the evaluation of strategic options for its commercial marine operations and a reduction from five operating businesses to three core units based around civil aerospace, defence and power systems.

Rolls-Royce said it will consolidate its naval marine and nuclear submarines operations within its existing defence business, and civil nuclear operations within its power systems business.

“These actions are designed to align our business more closely with our strategic vision to pioneer cutting-edge technologies that deliver vital power,” Rolls-Royce said in a release.

Chief executive Warren East said: “Building on our actions over the past two years, this further simplification of our business means Rolls-Royce will be tightly focused into three operating businesses, enabling us to act with much greater pace in meeting the vital power needs of our customers.”

Rolls-Royce has been pushing back from commercial marine equipment manufacturing for a number of years.

The company’s marine business has reduced its number of sites from 27 to 15 – an overall reduction in footprint of 40% – since 2015. It has managed a reduction in its workforce by 30% to 4,200, with the majority now based in the Nordic region.

The company said Wednesday that the time was now right for a strategic review of its commercial marine business.

East, the company’s CEO, said: “This is the right time to be evaluating the strategic options for our commercial marine operation. The team there has responded admirably to a significant downturn in the offshore oil and gas market to reduce its cost base. At the same time, we have carved out an industry-leading position in ship intelligence and autonomous shipping and it is only right that we consider whether its future may be better served under new ownership.”

Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.


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