LONDON (Alliance News) - Rolls-Royce Holdings Wednesday said it has signed an agreement to sell its energy gas turbine and compressor business to German engineering firm Siemens AG in a deal worth GBP785 million in cash.
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.
Rolls-Royce said that on completion of the transaction it will receive a further GBP200 million 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.
On completion of the transaction, Rolls-Royce's shareholding in the Rolls Wood Group joint venture, which provides maintenance, repair and overhaul services will be transferred to Siemens, the company 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," Rolls-Royce Holdings Chief Executive John Rishton said in a statement.
In a separate note Tuesday, energy services business John Wood Group PLC confirmed the establishment of EthosEnergy its gas turbine services joint venture with Siemens AG.
As previously announced EthosEnergy consists of the Maintenance and Power Solutions businesses of Wood Group GTS and Siemens' TurboCare business unit, which provides aftermarket gas turbine, steam turbine and generator design, repair and manufacturing services.
John Wood Group holds a 51% stake in Ethos Energy, while Siemens holds a 49% stake.
Rolls-Royce Holdings shares were trading at 1,030.00 pence Wednesday morning, down 0.9%. John Wood Group was quoted at 791.00 pence Wednesday morning, down 0.8%.
By Anthony Tshibangu; anthonytshibangu@alliancenews.com; @AnthonyAllNews
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