Rolls-Royce has agreed to sell its marine unit for £500m to Kongsberg, a maritime, technology and defence firm based in Norway.
The sale is part of Rolls-Royce's strategic review into its commercial marine operations, which made an operating loss of £70m in 2017.
Disposal of the unit is expected to have a £50m positive profit impact for Rolls-Royce.
"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."
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The move is valued at £500m, though after takingpension liabilities and other costs into account, it will net the company between £350m and £400m.
Geir Håøy, chief executive and president of Kongberg, said: "The acquisition of Rolls-Royce Commercial Marine makes us a more complete supplier to the maritime industry. The maritime industry is becoming increasingly globalised and is undergoing considerable technological and market driven changes.
"With this acquisition we will strengthen our strategic position with shipowners, shipyards and other customers and partners."