Siemens Energy bids EUR 4bn to take full control of Siemens Gamesa

Munich-based Siemens Energy AG (ETR:ENR) is offering EUR 18.05 (USD 19.09) per share in cash to acquire the 32.9% interest it does not already own in Siemens Gamesa Renewable Energy SA (BME:SGRE) in a bid to stop the "deteriorating situation" at the Spain-based wind turbine maker.

After the closing of the transaction, expected in the second half of 2022, Siemens Energy will delist the business from the stock market and fully integrate it.

The offered price implies a premium of 27.7% to the last unaffected closing share price of Siemens Gamesa of EUR 14.13 on May 17, Siemens Energy said on Saturday.

The full ownership of the wind turbine manufacturer will enable Siemens Energy to implement the necessary measures to stabilise the business which is in dire straits. Plagued by internal problems, eroding turbine revenues and supply chain chaos, Siemens Gamesa issued three profit warnings and saw its net loss swell to EUR 780 million in its first half through the end of March.

Simplified processes, leaner governance and a more streamlined structure are expected to improve Siemens Gamesa's financial situation and drive growth.

According to Siemens Energy, full integration of the business would result in cost synergies of up to about EUR 300 million annually within three years thanks to better supply chain and logistics costs, aligned project execution, joint and integrated R&D efforts as well as an optimised administrative structure.

The restructuring is expected to lead to revenue synergies of a mid-triple-digit-million euro amount in the mid to long-term.

"It is critical that the deteriorating situation at SGRE is being stopped as soon as possible, and the value-creating repositioning starts quickly. The supervisory board strongly supports the executive boards plans for the integration of SGRE,” said Siemens Energy's chairman Joe Kaeser.

Up to EUR 2.5 billion of the takeover price totalling up to EUR 4.05 billion (USD 4.28bn) will be financed with equity or equity-like instruments and the remaining part with available cash and debt.

(EUR 1 = USD 1.058)

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