Rolls-Royce wins $11 billion contract to power UK nuclear submarines

Published 01/23/2025, 07:04 PM
Updated 01/24/2025, 05:06 AM
© Reuters. FILE PHOTO: The logo of Rolls-Royce is pictured at the World Nuclear Exhibition (WNE), the trade fair event for the global nuclear community in Villepinte near Paris, France, June 27, 2018. REUTERS/Benoit Tessier/File Photo
RYCEY
-

LONDON (Reuters) -Britain said on Friday it had awarded Rolls-Royce (OTC:RYCEY) a 9 billion pound ($11 billion) eight-year contract to design, make and support the nuclear reactors that power its fleet of submarines, amid U.S. calls for higher defence spending.

The deal will strengthen the Royal Navy's continuous at-sea deterrent - under which at least one nuclear-armed ballistic missile submarine patrols the seas at all times - while also boosting the AUKUS defence pact with the United States and Australia, Britain's Ministry of Defence (MOD) said.

The announcement comes after U.S. President Donald Trump repeated demands on Thursday for NATO members like Britain to spend 5% of gross domestic product (GDP) on defence.

Amid rising tensions with Russia, highlighted by what Britain said was a Russian spy ship in UK waters earlier this week, the UK government has said it will increase defence spending to 2.5% of GDP but has not provided a timeline.

The defence industry is awaiting more details on the route to the 2.5% spending level from the government's Strategic Defence Review, which defence minister John Healey said on Friday was still due to be published in the spring, following speculation it could be delayed.

Healey said the contract with Rolls-Royce, which also makes engines for aircraft, would save Britain 400 million pounds over eight years by combining multiple contracts into one.

"It's a boost to British jobs, British business. It's a boost to our nuclear deterrent," he told Sky News.

The new contract, called Unity, will also support work on the Dreadnought class of nuclear submarines which are currently being built by BAE Systems (LON:BAES).

Unity is also expected to create 1,000 jobs and safeguard 4,000 others, the government said.

© Reuters. FILE PHOTO: The logo of Rolls-Royce is pictured at the World Nuclear Exhibition (WNE), the trade fair event for the global nuclear community in Villepinte near Paris, France, June 27, 2018. REUTERS/Benoit Tessier/File Photo

"It really shows the way that defence is part of the engine for economic growth in this country," Healey said on a visit to Rolls-Royce's nuclear reactor production facility in Derby, central England.

($1 = 0.8119 pounds)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2025 - Fusion Media Limited. All Rights Reserved.