Rolls Royce has confirmed today that it’s agreed to sell its energy gas turbine and compressor business to Siemens for £785m in cash.
Once the transaction’s completed, Rolls Royce will get a further £200m for a 25-year licensing agreement that’ll give Siemens access to relevant technology and Rolls Royce’s power output gas turbine range.
The profitable business has around 2,400 employees. Siemens already employs over 83,000 people in its energy sector, with underlying profit of €1.9bn.
John Rishton, Rolls Royce’s chief executive, says the agreement will allow the firm to focus on the areas of business where it can “add the most value”. A week ago, it said it expects revenue and profit to be flat this year, with cash flow not improving from 2013.
Rolls Royce has gained slightly this morning, up 0.1 per cent, while Siemens is down 0.5 per cent.