Siemens Exits Power, Gas, Renewable Biz

May 8, 2019

Pic: Siemens Gamesa Renewable Energy
Pic: Siemens Gamesa Renewable Energy

German conglomerate Siemens AG said it will spin off and give up its majority stake in its energy division and merge it with separately listed wind turbine supplier Siemens Gamesa Renewable Energy (SGRE), creating a new multi-technology global energy powerhouse.
 
The company’s supervisory board announced the spinoff on May 7 as part of its Vision 2020+ strategy concept. The board said the move would help Germany-based Siemens meet medium-term growth and profit targets by “clearly focusing its portfolio on dynamic growth markets and efficiency gains.”

"Siemens’ Gas and Power (GP) – comprising the company’s oil and gas, conventional power generation, power transmission and related services businesses – is to be given complete independence and entrepreneurial freedom through a carveout and a subsequent public listing (spinoff)," said the statement.



Plans call for the stock exchange listing to take place by September 2020. Siemens will also give up its majority stake in GP.

However, it will remain a strong anchor shareholder in the new company, with a stake that is to be initially somewhat less than 50 percent and, for the foreseeable future, above the level of a blocking minority holding.

Siemens will continue to support the new company, for example, through the professional services of Siemens’ Financial Services, the strong sales network of the Siemens Regions and the licensing of the powerful Siemens brand.

A decision regarding the spinoff and subsequent public listing is to be made at an extraordinary shareholders’ meeting, probably in June 2020. Siemens will then deconsolidate both the new GP and SGRE.

“This move will create a powerful pure play in the energy and electricity sector with a unique, integrated setup – an enterprise that encompasses the entire scope of the energy market like no other company,” explained Joe Kaeser, President and CEO of Siemens AG.

“Combining our portfolio for conventional power generation with power supply from renewable energies will enable us to fully meet customer demand. It will also allow us to provide an optimized and, when necessary, combined range of offerings from a single source. We’re convinced that this strategic decision will be positive for all participants and enable long-term value creation for customers, employees and shareholders – as can also be seen in recent market successes such as those in Iraq, which we’ll jointly continue to pursue,” added Kaeser.



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