Acquisition

8 July, 2008

   ROLLS-ROYCE ANNOUNCES INTENTION TO ACQUIRE SCANDINAVIAN ELECTRIC HOLDING    

Rolls-Royce has announced its intention to acquire Scandinavian Electric
Holding (SEH), a supplier of system packages for diesel-electric marine
propulsion systems, continuing its growth strategy in the marine market. The
acquisition, from Borea Opportunity II AS, requires approval from the Norwegian
competition authorities, which is expected to be completed within a few weeks.

Rolls-Royce will purchase 100 per cent of the equity of SEH for cash
consideration of NOK 430 million (£43 million). The company will form part of
the Rolls-Royce marine business.

The acquisition is consistent with the company's strategy of adding new
capabilities and expanding into integrated power systems.

SEH currently employs 150 people, in Bergen, Norway, and Gdansk, Poland, and
recorded sales of £40 million in 2007 and has a current order book of £100
million. SEH has a strong track record in offshore supply and service vessels,
and will extend system design capability for Rolls-Royce UT Design offshore
support and service vessels.

For further information please contact

Mark Alflatt
Director of Financial Communications
[e-mail]
Tel: [phone]

Nicky Louth-Davies
Director of Corporate Communications
[e-mail]
Tel: [phone]

Notes:

1. The Marine business of Rolls-Royce employs over 7,000 people in 34 countries
with the main manufacturing centres being in the UK, the Nordic countries, the
United States and increasingly Asia.

2. Rolls-Royce has a strong track record in its marine offshore business with
around 650 of its UT Design vessels either in service or on order. The vessels
- designed by Rolls-Royce - incorporate a range of its marine equipment,
including diesel engines, deck machinery, thrusters and automation and control
systems.

3. Rolls-Royce is a world leader in marine solutions, providing products,
service and expertise to more than 20,000 commercial and naval vessels in the
offshore, merchant, naval and submarines markets. It designs ships and its
product range includes propulsion systems featuring diesel engines and gas
turbines, propellers, thrusters and water jets. Rolls-Royce also provides
manoeuvring and stabilising systems and deck machinery.

4. About 40 per cent of marine turnover comes from aftermarket service support,
with a global customer support network of sales and service centres in 33
countries.