Siemens AG is acquiring an additional 18 per cent stake in its Indian arm Siemens Ltd for Euro 2.1 billion ($2.28 billion or Rs 18,950 crore). The purchase will see its shareholding rise to 69 per cent from 51 per cent.
The German parent will acquire the stake from Siemens Energy, whose stake in Siemens Ltd will come down from 24 per cent to 6 per cent.
Siemens said in a press statement that it and Siemens Energy will propose to the board of Siemens Ltd to demerge its energy business. The move will see Siemens Energy ultimately acquiring a controlling stake in the demerged energy business. The German conglomerate added that the aim is to complete the demerger in 2025.
“With the intended acquisition, Siemens and Siemens Energy accelerate unbundling the business activities of the Indian subsidiary of Siemens. The purchase price reflects a customary discount of 15 per cent on the five-trading-days volume-weighted average price before the day of signing. Siemens will provide no new guarantees to Siemens Energy,’’ the company said.
In 2020, shareholders of Siemens AG had approved a proposal to spin off its energy business to Siemens Energy.
This was part of its plan to establish an independent company focussed on the energy sector while Siemens will concentrate on businesses such as digital industries, smart infrastructure and Siemens Mobility.
However, the energy business was not separate in India as it was not “feasible at that time’’.
“Together, we shaped a solution that is in the best possible interests of all parties and accelerates the separation of Siemens and Siemens Energy in India.
“Besides the immediate cash inflow, we are also enabling an additional line for customer guarantees, making a strong overall contribution to the future stability and growth of Siemens Energy,” Roland Busch, president and CEO of Siemens AG, said while commenting on the development.
He added that for its shareholders, the accelerated demerger of Siemens India’s energy activities will further sharpen the portfolio focus of the company.
Further, it is also expected to simplify and strengthen its corporate structure in India which Busch said is a fast-growing and strategically important market.
