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Rolls-Royce to sell Spanish ITP Aero unit for £1.4bn

The Telegraph logo The Telegraph 04/08/2021 Louise Moon
Rolls Royce © Provided by The Telegraph Rolls Royce

Rolls-Royce is in exclusive talks to sell its Spanish unit to private equity firm Bain Capital for about €1.6bn (£1.4bn), as it looks to raise cash and repair its balance sheet.

Boston-based Bain Capital is set to team up with construction engineering firm Sener Grupo de Ingenieria to acquire Rolls Royce’s ITP Aero Division. Spanish newspaper Expansión first reported news of the sale.

It follows months of Bain searching for Spanish partners to try to secure government backing to buy the aircraft engine and turbine maker. Previous reports said the auction had narrowed to just Bain and London-based buyout rival Cinven.

The blue-chip engine maker said: "Rolls-Royce confirms it has decided to enter into exclusive discussions with a consortium led by Bain Capital on a potential sale of the business. There can be no certainty that an agreement will be reached. Rolls-Royce will make a further statement as appropriate."

Rolls-Royce last year announced it is on the hunt to raise at least £2bn from asset sales, in a bid to repair a balance sheet wrecked by the pandemic. Government restrictions on traveling have crushed demand for larger aircraft powered by its engines. 


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Earlier on Wednesday it agreed to sell its Norwegian maritime engine-making arm Bergen Engines to Britain’s Langley Holdings for €63m (£54m). 

ITP, which is set to remain a supplier following the potential deal, is Rolls-Royce’s biggest asset. A deal of €1.6bn would earn the firm slightly more than previous estimates that have valued the Spanish firm at €1.5bn.

Bain's partner Sener is a former owner of ITP Aero, having co-founded the division in 1989 with Rolls-Royce to make engines for the Eurofighter Typhoon military jet. In 2016, Sener sold its 53pc stake in the operation back to Rolls for €720m. 

Headquartered in the Basque region, ITP has worked with Rolls to develop turbines used on Airbus and Boeing wide-body aircraft. It is also responsible for the maintenance of Spanish Armed Force engines.

Sky News had previously reported that rival Spanish aerospace group Aciturri was planning its own bid, while investment outfits KKR and TowerBrook Capital were also said to be in the running.

Bain Capital declined to comment.

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