Rolls-Royce has agreed to sell its energy gas turbine and compressor business to Siemens for £785m, in a move to strengthen its position in the energy sector.
The German firm said in a statement, “Siemens is acquiring the Rolls-Royce Energy aero-derivative gas turbine and compressor business and thereby strengthening its position in the growing oil and gas industry as well as in the field of decentralised power generation”.
It added that the technology was “an attractive power supply option in the oil and gas industry”.
The business has 2,400 employees. It made £72m underlying profit in 2013 and £871m revenue. The deal includes aero-derivative gas turbines and compressor systems, and Rolls-Royce will receive an additional £200mfor a 25-year licensing agreement on access to technology.
John Rishton, Rolls-Royce’s CEO, commented, “This agreement will give the energy business greater opportunities as part of a much larger energy company and allows Rolls-Royce to concentrate on the areas of business where we can add most value.”
A Siemens spokesperson in Lincolnshire added, “There is strong industrial logic to the deal. Siemens is strengthening our position in the market for gas turbines and closing a gap in our current portfolio while increasing our UK presence.
“Siemens is acquiring this business with the intention of growth and continued innovation.”
The manufacturing giant announced in March a major £310m investment in an offshore wind facility in Hull, as part of the company’s global strategy, recognising the potential of the offshore British wind sector.
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