LONDON (Alliance News) - John Wood Group PLC Tuesday said it will create a gas turbine joint venture with German giant Siemens that it expects to deliver USD15 million in synergies by year three and improve the prospects for its gas turbine unit.
The energy services company said it will own 51% of the new venture, with Siemens taking 49%. It will include Wood Group's maintenance and power businesses and Siemens' turbocare unit, which provides aftermarket gas turbine, steam turbine and generator design, repair and manufacturing services. It will employ about 4,500 and have revenues of about USD1 billion.
Wood Group said it is expecting to get a payment of about USD70 million from the joint venture, and expects the the deal to complete in the first quarter of 2014 after several necessary approvals are cleared.
The head of Wood Group's gas turbine unit, Mark Dobler, will step down from the company's board and head the joint venture.
"The Board believes that the establishment of the JV will improve the future prospects of Wood Group's gas turbine activities, which have typically delivered stronger performance when differentiated by a relationship with an original equipment manufacturer," the company said in a statement.
"The JV will bring together Wood Group's capabilities in the areas of asset operations, maintenance, risk management & life-cycle optimization with the aftermarket design, repair & manufacturing capabilities of TurboCare to deliver greater flexibility, greater market reach and an expanded footprint to service customers," Dobler said.
By Steve McGrath; stevemcgrath@alliancenews.com; @SteveMcGrath1
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