German engineering giant Siemens, which is seeking to buy French firm Alstom's energy division, is in talks to purchase Rolls-Royce's energy production arm, AFP reports according to the British aircraft engine maker.
"Following media reports, Rolls-Royce confirms it is in talks with Siemens regarding the sale of its energy gas turbine and compressor business," the London-listed group said in a statement that gave no indication of price.
"This supplies aero-derivative gas turbines, compressor systems and related services to customers in the oil and gas and power generation sectors.
"These talks have not concluded and we will make a further announcement in due course."
A company spokesman added that the deal would exclude its nuclear power interests.
A source close to the matter told AFP that the division was worth about £900 million ($1.5 billion, 1.1 billion euros) -- the same level as its annual turnover excluding the nuclear power business.
The entire division has an annual turnover of £1.538 billion.
The news comes one day after Siemens revealed it had decided to make an offer for Alstom's energy unit, in a bid to thwart a rival bid from US giant General Electric.
The brief Rolls-Royce statement was issued to the London Stock Exchange on Wednesday, after being released by the company overnight.