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Max Marquardt

October 3, 2018

Question: What recent global events or changes have an impact on Rolls-Royce as a


business?

The Competitive Market is Stirring


(1) Advanced Turbine Engine Company (ATEC) is a joint venture between Pratt &
Whitney and Honeywell International to produce auxiliary power units (APU)1
(2) United Technologies Corp. acquisition of Rockwell Collins nears completion2
(3) Engine Alliance is a joint venture between Pratt & Whitney and GE Aviation3
(4) GE Aviation and GE divesting MRS Solutions and Baker Hughes4
(5) CFM International is a joint venture between GE Aviation and Safran5
(6) Safran acquisition of Rockwell Collin’s actuators and pilot controls6
(7) Safran is establishing a joint venture with Boeing to produce APU systems7

The Technology and Consumer Trends


(1) “$1.1 trillion Space Industry future predictions (2040)” valuation by Morgan
Stanley8
(2) “50% Belief that people will travel in space” poll by Pew Research Center9
(3) “2400 Nano-satellites set to launch” insight by Accenture10
(4) “Blue Origin (partnership with United Launch Alliance), Northrop Grumman’s
Orbital ATK, Virgin Galactic, and SpaceX Rockets” represent the joint ventures,
acquisitions, and strong confidence in the emerging cislunar (between Earth and
moon) markets.
Max Marquardt
October 3, 2018
1
Reim, Garrett. “Honeywell and Pratt & Whitney Joint Venture Submits ITEP Proposal.”
Flight Global, 30 July 2018, www.flightglobal.com/news/articles/honeywell-and-pratt-
whitney-joint-venture-submits-450769/.

2
Sutherland, Brooke. “This Expensive Aerospace Deal Is Leaking Fuel.”
Bloomberg.com, Bloomberg, 10 Sept. 2018, www.bloomberg.com/news/articles/2018-
09-10/this-expensive-aerospace-deal-is-leaking-fuel.

3
Yusof, Ayisy. “Airbus A380 Remains Relevant in the Commercial Aviation.”
Nst.com.my, 7 Aug. 2018, www.nst.com.my/business/2018/08/398937/airbus-a380-
remains-relevant-commercial-aviation.

4
“General Electric's GE Aviation Unit to Divest MRA Systems.” NASDAQ.com, Nasdaq,
14 Sept. 2018, www.nasdaq.com/article/general-electrics-ge-aviation-unit-to-divest-mra-
systems-cm1022989.

5
Tangel, Andrew, and Doug Cameron. “At Boeing Factory, Unfinished 737s Pile Up.”
The Wall Street Journal, Dow Jones & Company, 3 Sept. 2018,
www.wsj.com/articles/at-boeing-factory-unfinished-737s-pile-up-1535972401.

6
Lecompte-Boinet, Guillaume. “Safran To Buy Collins Actuators and Pilot Controls
Unit.” Aviation International News, 7 Sept. 2018, www.ainonline.com/aviation-
news/business-aviation/2018-09-07/safran-buy-collins-actuators-and-pilot-controls-unit.

7
“Boeing, Safran Agree to Design, Build and Service Auxiliary Power Units.” Safran, 5
June 2018, www.safran-group.com/media/boeing-safran-agree-design-build-and-
service-auxiliary-power-units-20180604.

8
Sheetz, Michael. “Morgan Stanley Predicts Space Industry Will Triple in Size: Here's
How to Invest.” CNBC, CNBC, 12 Oct. 2017, www.cnbc.com/2017/10/12/morgan-
stanley-how-to-invest-in-1-trillion-space-industry.html.

9
Funk, Cary, and Mark Strauss. “Majority of Americans Believe Space Exploration
Remains Essential.” Pew Research Center, 26 July 2018,
www.pewinternet.org/2018/06/06/majority-of-americans-believe-it-is-essential-that-the-
u-s-remain-a-global-leader-in-space/.

10
“Launchpad to Relevance.” Technology Vision 2018, Accenture, 1 June 2018,
www.accenture.com/t20180614T034521Z__w__/us-en/_acnmedia/PDF-79/Aerospace-
Defense-Tech-Vision-2018.PDF#zoom=50.