Melrose Industries shares rise as it signs £4bn deal with GE Aerospace
- Aerospace group FTSE-100 signs a strategic partnership worth $5 billion
- Deal expands risk and revenue sharing on GE Aerospace’s GEnx engine
Melrose Industries has seen its share price rise after signing a multibillion-dollar deal with global aerospace engine company GE Aerospace.
The agreement sees Melrose’s GKN Aerospace Engines expand their strategic risk and revenue sharing partnership on GE Aerospace’s GEnx high-thrust engine.
Aerospace group FTSE-100 revealed that the aftermarket services deal will be worth around $5 billion (about £4 billion) over the approximately 30-year life of the engine.
Deal: Melrose has revealed that its new aftermarket services deal with GE Aerospace will be worth around $5 billion (about £4 billion)
Melrose Industries Stock have risen 4.04 percent to 509.60p in Monday morning trading.
In a trading update, Melrose said: ‘As part of the agreement, GKN Aerospace will help drive the GEnx program towards its cost and carbon emissions reduction targets by bringing in its new proprietary technology, particularly with additive manufacturing.
“GKN Aerospace will also join GE Aerospace’s global aftermarket repair network, supporting GEnx with specialized repair content for complex structural components.”
It expects the next trading update date to be on November 16.
Simon Peckham, CEO of Melrose, said: “This agreement illustrates the unique breadth and quality of our business in the aerospace engine industry and its position as a technology leader.
“We very much look forward to deepening our relationship with GE.”
In September, Peckham said his controversial takeover of GKN had helped create a British ‘aerospace champion’ – as he announced plans to step down.
Peckham said the purchase of the historic manufacturer for £8 billion five years ago had revived a “vanishing British industrial icon”.
However, he did not rule out selling the company, raising the prospect of a foreign takeover.
The CEO will leave next March after 20 years, while executive vice-chairman Christopher Miller and chief financial officer Geoffrey Martin are also leaving.
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