If it wins the backing of regulators, the combined firm will be named Woodward L’Orange and will join Woodward’s industrial unit.
Andreas Schell, president and chief executive of Rolls-Royce Power Systems, said: “Rolls-Royce Power Systems will remain a key customer of Woodward L’Orange.
“We have enjoyed working with L’Orange who have a leading position in their markets, excellent technology, a skilled workforce and strong leadership. We wish them well as they join the Woodward organisation.”
Rolls-Royce, which has 50,000 staff across 50 countries, announced a return to profit in March. It recorded a pre-tax surplus of £4.9bn for 2017, thanks to a £2.6bn accounting boost from the strengthening of the Brexit-hit pound.
This marked a recovery from a dire 2016, when it fell into the red by £4.6bn in what was its largest ever loss and one of the biggest in UK corporate history, after being knocked by the pound’s plunge and a corruption scandal.
On an underlying basis, Rolls saw annual pre-tax profits rise 25pc to £1.1bn in 2017.