Rolls-Royce deal could earn $2.6bn for firm
Rolls-Royce confirmed on Monday that it was chosen to provide engines for the US Air Force B-52 Stratofortress bombers.
The deal could be worth as much as $2.6bn for the British engineering company.
The F-130 engines will be made at Rolls-Royce’s Indianapolis, Indiana facility.
They were selected as replacement engines for the bombers, for an initial $500m six-year deal, which could reach as high as $2.6bn over the long-term.
The Rolls-Royce share price is up by 6.73% during the morning session on Monday, its highest point since June 2020.
“Rolls-Royce continues to bounce back. Having already seen a pick-up in its share price in recent weeks thanks to more restrictions being lifted on air travel which should benefit its plane engine maintenance operations, its shares have now hit an 18-month high after a new contract win. It has a struck a deal with the US Air Force which means its F-130 engine will power the B-52 for the next 30 years,” says Russ Mould, investment director at AJ Bell.
Jefferies analyst Andy Douglas told Reuters that the news “provides additional comfort to longer-term consensus forecasts and is a positive for sentiment”.
The new engines will enable the bombers to continue missions into the 2050s.