Rolls-Royce has agreed to sell its Energy gas turbine and compressor business to Siemens (NYSE: SI) for a £785 million ($1.3 billion) cash consideration. The business supplies aero-derivative gas turbines, compressor systems and related services to customers in the oil and gas and power industries.
When the deal is completed, Rolls-Royce will receive another £200 million ($339.4 million) for a 25-year licensing agreement that would allow Siemens to use Rolls-Royce’s aero-derivative technology for use in the 4- to 85-MW gas turbine range.
The boards at both Siemens and Rolls-Royce have approved the deal, which is expected to close before the end of December. Upon closing, Rolls-Royce’s shareholding in the Rolls Wood Group joint venture will be transferred to Siemens. That unit provides maintenance, repair and overhaul services. The new joint venture between Wood Group and Siemens will be named EthosEnergy. Mark Dobler, previously the CEO of Wood Group GTS, has been named the CEO of EthosEnergy. Neil Sigmund, the previous CEO of TurboCare, is deputy CEO of the new JV; and Chris Watson, previously the CFO of Wood Group GTS, will serve as CFO of EthosEnergy. the company’s primary offices will be in Houston, Aberdeen, Scotland; and Orlando, Florida.