Rolls-Royce hits all-time high on US engine deal

US PLANE engine maker Pratt & Whitney agreed a surprise $1.5bn (£952m) deal to buy Rolls-Royce’s share of the International Aero Engines (IAE) consortium, sending shares in Rolls-Royce to an all-time high.

As well as the deal for IAE -- which makes the V2500 engine for Airbus A320 jets -- the pair also said they would form a partnership to develop engines for the next generation of medium-haul aircraft to replace revamped versions of the A320 and Boeing’s 737 narrow-body planes.

Rolls shares, which have outperformed the FTSE All Share Aerospace & Defence Index by 14 per cent over the past year, hit an all-time high of 684.5p in early trade and closed even higher at 688p, valuing the firm at around £11.72bn.