Rolls-Royce sells energy turbine business to Siemens for 0.8bn pounds

7th May 2014 06:46

Engine maker Rolls-Royce has announced that it is selling its energy gas turbine and compressor business to German engineering group Siemens.The unit, which supplies aero-derivative gas turbines, compressor systems and related services to customers in the oil and gas and power generation sectors, is to be sold for £785m in cash.As part of the deal, Rolls-Royce will also receive a further £200m for a 25-year licensing agreement, giving Siemens access to relevant technology.Rolls-Royce had confirmed media speculation last month that the two companies were in talks regarding the sale. The UK-based firm said that the transaction provides it with "additional cash to invest in growth"."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," said Chief Executive John Rishton.As for Siemens, the deal forms part of a major strategic overhaul of the group under which it will be restructured into nine divisions, disbanding its current four-sector structure. Siemens also announced that it would manage its healthcare business separately and is planning on a public listing of its hearing-aid unit.BC