(Changes attribution to Rolls-Royce, adds Siemens' statement)
By Brenda Goh, Anjuli Davies and Alexander Hübner
April 29 Britain's Rolls-Royce said on
Tuesday it was in talks with Germany's Siemens AG to
sell a unit that makes equipment for the oil and gas industry
and power-generation gear for utilities.
Sources familiar with the matter told Reuters earlier that
Siemens was considering paying just under 1 billion euros ($1.38
billion) for Rolls-Royce's energy businesses outside of the
Siemens' talks with the British company are part of a new
strategy that the German engineering group will present on May
7, a Siemens spokesman said.
The news comes on the same day Siemens said it would make an
offer for French engineering group Alstom's power
business if it is given enough time to draw up a detailed plan
to rival a bid by General Electric.
Rolls-Royce's energy and nuclear business had revenue of
1.54 billion pounds ($2.59 billion) in 2013, the company said on
its website. Excluding nuclear, the unit had revenue of about
940 million pounds.
"We've always felt that (the unit) would be better suited
elsewhere as it appears sub-scale against larger competitors
like GE, Mitsui and Siemens," RBC Capital
Markets analyst Robert Stallard wrote in a note to clients,
adding that he expected news of the potential deal to be well
"We wouldn't be surprised to see some future agreement
include a provision for Rolls to keep injecting technology into
a Siemens-owned business."
Sources said the talks between Rolls-Royce and Siemens had
been going on long before the Alstom deal cropped up.
($1 = 0.5936 British pounds)
(Writing by Richa Naidu; Additional reporting by Alex Huebner,
Arno Schuetze, Maria Sheahan and Sweta Singh; Editing by Erica
Billingham and Leslie Adler)