Rolls-Royce (RR.L) is in talks to buy the marine propulsion unit of Finnish power plant and ship engine maker Wartsila (WRT1V.HE), Bloomberg reported, citing three people familiar with the matter.
However, Wartsila may oppose the sale, the sources told Bloomberg. The company has refused other approaches for the unit, where it sees potential for growth, the report added.
Wartsila's ship power unit accounted for 28 percent of group net sales in 2012.
Rolls, the world's second-largest maker of aircraft engines behind U.S. group General Electric (GE.N), lowered its profit guidance for its marine business in November, from modest growth to broadly flat.
The company generated 18 percent of its 2012 revenue from the marine division.
Rolls-Royce and Wartsila were not available for comments outside regular business hours.
(Reporting by Abhirup Roy in Bangalore)