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Siemens buys Rolls-Royce gas turbine and compressor business for USD 1.3bn

07th May 2014

Rolls-Royce has announced that it has signed an agreement to sell its Energy gas turbine and compressor business to Siemens for around USD 1.3bn cash consideration

Siemens buys Rolls-Royce gas turbine and compressor business for USD 1.3bn
Rolls-Royce's Energy gas turbine and compressor business has around 2,400 employees

The business being sold supplies aero-derivative gas turbines, compressor systems and related services to customers in the oil and gas and power generation sectors.

On completion of the transaction, Rolls-Royce will receive a further USD 335m for a 25-year licensing agreement, granting Siemens access to relevant Rolls-Royce aero-derivative technology for use in the 4 to 85 megawatt power output gas turbine range.

Rolls-Royce's Energy gas turbine and compressor business has around 2,400 employees. In 2013, it was reported within the results of the Energy business where it contributed about USD 1.5bn of revenue and USD 120m of underlying profit. Siemens' Energy sector has around 83,500 employees and in 2013 contributed revenue of USD 26.6bn and underlying profit of USD 1.9bn.

John Rishton, Rolls-Royce, CEO, 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.”

The transaction excludes certain smaller Power Generation sector assets. On completion of the transaction, Rolls-Royce's shareholding in the Rolls Wood Group (RWG) joint venture, that provides maintenance, repair and overhaul services, will be transferred to Siemens.

The transaction has been approved by the boards of directors of Rolls-Royce and Siemens, and is expected to complete before the end of December 2014, subject to closing conditions, including regulatory approvals.

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