Rolls-Royce has agreed to sell its loss-making commercial marine business to Norwegian firm Kongsberg for an enterprise value of £500m.
The Derby manufacturer said the net proceeds will be around £350m to £400m after taking pension liabilities and other costs into account.
The announcement comes as Rolls-Royce enacts a sweeping restructuring plan aimed at saving £400m per year.
The transaction has been approved by the boards of both companies and is expected to close in the first quarter of 2019, subject to clearance from the regulatory authorities.
“This transaction builds on the actions we have taken over the last two years to simplify our business,” said chief executive Warren East.
“The sale of our commercial marine business will enable us to focus on our three core businesses and on meeting the vital power needs of our customers.”
Rolls-Royce’s commercial marine arm has approximately 3,600 employees, most of which are based in the Nordic region.
Last year the division generated revenue of £817m with an operating loss of £70m.
The disposal of the marine business is expected to have a positive profit impact of around £50m based on 2017 figures, Rolls-Royce said.
The Commercial Marine president, Mikael Makinen, said: “Rolls-Royce has been responsible for leading many of those technological advancements, and with combination of great people, market-leading technology and a desire by Kongsberg to take this business to the next level, I am sure that this business will prosper in the years to come.
“We will now work closely with Kongsberg as we go through the transition in the months ahead.
“I would like to pay tribute to the 3,600 Commercial Marine employees who have maintained absolute focus on their day jobs, winning business and maintaining the levels of support our customers expect.”
— With assistance by Ryan Wilkinson