Siemens pursues Rolls-Royce power deal alongside Alstom

• 10 years ago (2014-05-01)
• Junior Isles

Europe 1089 Nuclear 659

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Rolls-Royce has revealed that it is in discussions to sell its power generation assets to Siemens AG, further complicating the succession of asset sales prompted by the GE-Siemens tussle over Alstom.

Rolls-Royce has said negotiations have not yet concluded, but are concerning gas turbines derived from aero engines, as well as compressor systems and related services.

Rolls-Royce’s energy portfolio is its smallest unit by revenue, but still accounted for approximately £1.05 billion ($1.8 billion) during 2013. The company is now seriously considering dispensing with much of this portfolio in response to similar reshuffles amongst some of Europe’s biggest firms.

Siemens is interested in Rolls-Royce’s non-nuclear energy businesses and is now pursuing acquisition alongside its bid for Alstom, according to deal insiders.

Siemens’ CEO Joe Kaeser is looking to expand the firm’s energy business as part of plans to improve profitability and catch up with key rival GE.

Rolls-Royce’s energy unit sourced 68 per cent of its 2013 revenue from oil and gas operations, with 21 per cent from non-nuclear power generation and 11 per cent nuclear industry, according to the company’s annual report.