Aerospace engines maker Rolls-Royce today said it has agreed to sell its energy turbine and compressor business to German engineering group Siemens for £785 million in cash.
When the deal completes, Rolls-Royce will receive a further £200m under a 25-year licensing agreement.
The business being sold has about 2,400 employees and delivered an underlying profit of £72m to its parent last year.
Rolls-Royce chief executive John Rishton 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.”
Siemens is also eyeing the power division of struggling French engineer Alstom, but faces a rival bid from US conglomerate General Electric.