A NEW business link between Derby aero-engine maker Rolls-Royce and an investment fund based in the United Arab Emirates has been approved by the European Commission.

The maintenance deal has been cleared under merger rules as not interfering in fair competition in Europe.

Rolls-Royce is joining forces with the Mubadala investment fund to set up a new joint venture to provide repair and overhaul services for aircraft engines, primarily in North Africa and the Middle East.

A commission statement at the end of a routine merger inquiry says: "Rolls-Royce is active in the development, production and sale of civil aircraft engines, power systems for military aerospace, marine and energy applications, as well as after-sales services.

"Mubadala is an investment fund controlled by the Emirate of Abu Dhabi in the United Arab Emirates.

"The commission's investigation found that the parties' activities overlapped to a limited extent and concluded that their partnership would not raise competition concerns."

Last week, Rolls-Royce, which has its UK civil aerospace division in Sinfin, reported a 10% rise in full-year profits to £880m and a record order book of £55.5bn.

It is understood that the link-up with Mubadala will not directly affect Rolls-Royce's Derby operations.