Rolls-Royce sells energy arm to Siemens

Rolls-Royce has confirmed it has sold its energy production arm to Germany’s Siemens for £785m.

The deal, which was widely expected, also includes a further £200m for a 25-year licensing agreement that will give Siemens access to Rolls’ technology.

John Rishton, chief executive of Rolls, 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 energy business has around 2,400 employees, and reported revenues of £900m last year. The purchase is expected to be completed by the end of December.

Originally developed for use in the aviation industry, Rolls-Royce Energy's compact and highly efficient gas turbines are "an attractive power supply option in the oil and gas industry", especially on offshore oil platforms where space is limited, Siemens said.

Siemens, which unveiled a new strategic plan to focus on the growth fields of electrification, automation and digitalisation dubbed "Vision 2020", also announced plans to publicly list its audiology business which makes hearing instruments.

The company said a streamlining of its organisational structures to reduce bureaucracy and cut costs by 2016 will result in a productivity increase of one billion euros ($1.4bn).

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