Rolls-Royce has launched a strategic review of L’Orange, the German division of its business that manufactures fuel injectors for diesel engines.
The announcement follows reports surfaced last week suggesting L’Orange was to be sold for $700m.
“Rolls-Royce notes the recent media speculation and confirms that it is reviewing its strategic options for L’Orange.
“Irrespective of the outcome of this review, Rolls-Royce intends to maintain close ties to L’Orange, either as an owner or as a key customer,” the company said in a statement to the London Stock Exchange today.
If, at some point, a deal is reached, the sale would be the largest divestment since Warren East took over the CEO role at Rolls Royce in 2015.
The strategic review has no impact on the remainder of the Rolls-Royce Power Systems business, the group confirmed, and any decision about the future of L’Orange is subject to the approval of the supervisory board.
In August, Rolls-Royce took a step forward in its recovery after a jump in large engine deliveries helped the firm swing to a half-year profit.