Siemens is acquiring the Rolls-Royce Energy aero-derivative gas turbine and compressor business, thereby strengthening its position in decentralized power generation as well as its position in the oil and gas industry.
The purchase price is about $1.3 billion, and the transaction is expected to close before the end of December 2014, subject to regulatory approvals.
As part of the transaction, Siemens will get exclusive access to future Rolls-Royce aero-turbine technology developments in the 4-85 MW power output range as well as preferred access to supply and engineering services. For this 25-year duration agreement, Siemens will pay Rolls-Royce an additional $339 million.
By acquiring Rolls-Royce’s small and medium aero-derivative gas turbines with a power output of up to 66 megawatts (ISO/wet-rating), Siemens says it will close a technology gap in its gas turbine portfolio.
Originally developed for use in the aviation industry, Rolls-Royce Energy’s aero-derivative gas turbines are an attractive power supply option in the oil and gas industry, particularly for offshore oil platforms where space is limited. Due to their efficiency and fast start-up capabilities, aero-derivative gas turbines are also used for decentralized power generation in industry – their flexibility helps meet peak electricity demands, provide emergency power reserves and stabilize the power grid.