Siemens Buys Rolls-Royce Energy Business

Rolls Wood Group (RWG) will also be transferred to Siemens

Posted on May 7, 2014

Rolls-Royce has signed an agreement to sell its energy gas turbine and compressor business to Siemens for US$1.33 billion.

Once the transaction is complete, Rolls-Royce’s joint venture, Rolls Wood Group (RWG), which provides maintenance, repair and overhaul services, will be transferred to Siemens. Rolls-Royce will also receive a further US$339 million for a 25-year licensing agreement, granting Siemens access to relevant Rolls-Royce aero-derivative technology for use in the 4 to 85 MW power output gas turbine range.

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. The transaction excludes certain smaller power generation sector assets.

Rolls-Royce’s Energy gas turbine and compressor business has around 2400 employees. In 2013, it reported US$122 million of underlying profit.

John Rishton, Rolls-Royce’s chief executive officer, 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 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.