Melrose Industries has seen a rise in its share price after it signed a multi-billion dollar agreement with global aerospace engines firm, GE Aerospace.
The deal will see Melrose’s GKN Aerospace Engines expand its risk and revenue-sharing strategic partnership on GE Aerospace’s GEnx high-thrust engine.
The FTSE-100 aerospace group revealed that the aftermarket services agreement will be worth around $5billion (approximately £4billion) over the approximately 30-year life of the engine.
Deal: Melrose revealed that its new aftermarket services agreement with GE Aerospace will be around $5billion (approximately £4billion)
Melrose Industries shares are up 4.04 per cent to 509.60p in Monday morning trading.
In a trading update, Melrose said: ‘As part of the agreement, GKN Aerospace will help to drive the GEnx programme towards its cost and carbon emissions reduction targets through contributing its new proprietary technology, particularly with additive fabrications.
‘GKN Aerospace will also join GE Aerospace’s global aftermarket repair network, supporting GEnx with specialised repair content for complex structural components.’
It expects its next trading update date to be on 16 November.
Simon Peckham, Melrose CEO, said: ‘This agreement illustrates the unique breadth and quality of our business across the aerospace engines 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 helped create a British ‘aerospace champion’ – as he announced plans to step down.
Peckham said buying the historic manufacturer for £8billion five years ago has revitalised a ‘fading UK industrial icon’.
However, he did not rule out the business being sold, raising the prospect of a foreign takeover.
The chief executive will leave next March after two decades, with executive vice-chairman Christopher Miller and finance director Geoffrey Martin also departing.
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