Industrial giant Siemens is to build “a focused energy powerhouse” by moving the 59% share it owns in wind power business Siemens Gamesa Renewable Energy into the same business unit as its gas and power unit and spin-off the combined group.
The company said the plan would create a major player in the energy market with revenues of €30Bn (US$34Bn) and more than 80,000 employees. Following the spin-off, it plans to focus on digital industries and smart infrastructure.
“Siemens intends to meet its medium-term growth and profit targets by clearly focusing its portfolio on dynamic growth markets and efficiency gains. To this end, the supervisory board of Siemens AG has approved the next steps in the company's Vision 2020+ strategy concept, including the spin-off of Siemens Gas and Power,” the company said in a statement.
“With Vision 2020+, we are further sharpening Siemens’ focus and making our businesses faster and more flexible. These changes are laying the foundation for sustainable economic success in growth markets that will be attractive over the long term,” said president and chief executive Joe Kaeser.
Siemens’ gas and power unit – with the addition of Siemens Gamesa Renewable Energy – will be given complete independence through a carveout and a subsequent public listing.
The company hopes a stock exchange listing will take place by September 2020, when it will give up its majority stake in the combined gas and power and wind power business. However, it will remain an anchor shareholder in the new company, with a stake that is to be initially less than 50%, above the level of a blocking minority holding.
Siemens will continue to support the new company through the professional services of Siemens’ Financial Services, the sales network of the Siemens regions and the licensing of the 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 gas and power unit and wind power unit.
“This move will create a powerful pure play company 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,” said Mr Kaeser.
“Combining our portfolio for conventional power generation with power from renewable energies will enable us to fully meet customer demand. It will also allow us to provide an optimised and, when necessary, combined range of offerings from a single source. We are convinced that this decision will be positive for all participants and enable long-term value creation for customers, employees and shareholders.
Siemens Gas and Power chief executive Lisa Davis said, “Being independent will enable us to more effectively leverage our position of strength to further support our customers in rapidly changing energy markets.
“Global electrification continues to be vital to economic and environmental progress around the world, and as the only company with a leading portfolio along the entire energy value chain – in both conventional and renewable energy – we are uniquely able to help both public- and private-sector customers benefit from these developments.
“We will 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.”
The company has not yet made an announcement about where the combined company will be based or about any changes to the leadership of Siemens Gamesa Renewable Energy should there be any.