Gas Turbine

UK-based Rolls-Royce has agreed to sell its energy gas turbine and compressor business to Siemens for £785m ($1.3bn).

The business that will be sold provides aero-derivative gas turbines, compressor systems and associated services to firms operating in the oil and gas and power generation sectors.

Following the transaction, Rolls-Royce will receive an additional £200m for a 25-year licensing agreement, allowing Siemens access to the relevant company’s aero-derivative technology for use in the 4 to 85MW power output gas turbine range.

Rolls-Royce employs around 2,400 people within its energy gas turbine and compressor business segment and in 2013, it contributed £871m in revenue and £72m of underlying profit.

"Rolls-Royce will receive an additional £200m for a 25-year licensing agreement."

After completion of the transaction that excludes certain smaller power generation sector assets, Rolls-Royce’s shareholding in the Rolls Wood Group (RWG) joint venture, which provides maintenance, repair and overhaul services, will be transferred to Siemens.

Rolls-Royce CEO John Rishton said, "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."

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Subject to closing conditions, including regulatory approvals, the transaction is expected to be completed before the end of December 2014.

Image: Industrial gas turbine from Rolls-Royce. Photo: courtesy of Rolls-Royce plc.