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Siemens to transfer SGRE stake to spun-off unit in huge overhaul

Source: Siemens Gamesa Renewable Energy SA (www.siemensgamesa.com)

May 8 (Renewables Now) - German industrial major Siemens AG (ETR:SIE) plans to transfer its 59% stake in wind turbine maker Siemens Gamesa Renewable Energy SA (BME:SGRE) to a new company that will house its spun-off Gas and Power (GP) business.

Siemens announced the Supervisory Board's approval of the plan on Tuesday, saying that the GP operations will be carved out and then listed on the stock exchange by September 2020. The German group will keep an initial stake of less than 50% in the new company that will remain above the level of a blocking minority holding “for the foreseeable future”.

With this move, Siemens will create a new energy major with a business volume of EUR 30 billion (USD 33.6bn) and more than 80,000 employees, combining conventional power generation with power supply from renewable energies.

“We'll now have more freedom and agility to be able to concentrate fully on the highly specific and quickly changing requirements of our markets and customers. In addition, we'll be able to more directly control our costs and ensure that our stakeholders benefit directly from every euro we spend," explained Lisa Davis, CEO of Siemens' Gas and Power.

The proposal to spin off and list GP has to be cleared by investors at an extraordinary shareholders' meeting that is currently planned for June 2020.

Following the spin-off, the Digital Industries (DI) and Smart Infrastructure (SI) operating companies will become the group’s industrial core, supplemented by technology and service subsidiaries and its majority stake in Siemens Healthineers in addition to Siemens Mobility.

As part of its Vision 2020+ growth strategy, Siemens will be pursuing structural efficiency gains that would lead to savings of EUR 2.2 billion by 2023. These newly planned efficiency improvements include roughly 10,400 job cuts across SI, DI and Corporate Functions. Siemens, though, calculates that its planned growth would create some 20,500 new jobs by 2023, which equals a 10,000 net increase worldwide.

(EUR 1.0 = USD 1.120)

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