Siemens Forms $1 Billion Tie-Up to Boost Gas Services
Aberdeen, Scotland-based Wood Group will have a 51 percent stake in the venture, which comprises its maintenance and power solutions businesses and Siemens’s TurboCare gas- and steam-turbine design, repair and manufacturing unit.
“The joint venture with Siemens will bring together two complementary businesses and create a differentiated service offering for a global customer base,” Wood Group Chief Excecutive Officer Bob Keiller said in a statement today.
Siemens, which in August replaced CEO Peter Loescher with finance chief Joe Kaeser after a series of missed profit goals, has been seeking to expand its offerings in the oil and gas segments. Loescher told Bloomberg in May that the Munich-based company was looking to make bolt-on acquisitions in the sector. Siemens has been evaluating a bid for turbine and compressor maker Dresser-Rand Group Inc. (DRC) for as much as two years, people familiar with the situation told Bloomberg the same month.
The relevant units of Siemens and Wood Group have combined assets of $1 billion, of which $428 million comes from Siemens, and some 4,500 employees. The Wood Group division had pretax profit of $16.5 million in 2012, while the Siemens TurboCare reported profit on that basis of $20.8 million.
The deal, which the companies predict to be completed in the first quarter of 2014, includes a $70 million payment to the Wood Group by the joint venture for its 49 percent stake in Wood Group Pratt and Whitney, the turbine spare parts and technical support provider.
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