Siemens will transfer the 59% it owns in Siemens Gamesa Renewable Energy (SGRE) to its Power & Gas unit, which in turn will be given complete independence in a carve-out and subsequently be spun off in a public listing to take place by September 2020.
The German conglomerate will give up its majority stake in the future beefed-up Siemens Gas & Power, but will remain a strong anchor shareholder in the new company with a shareholding of initially less than 50%, but above the level of a blocking minority holding.
“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," said Siemens chief executive Joe Kaeser.
"Combining our portfolio for conventional power generation with power supply from renewable energies will enable us to fully meet customer demand.”
A decision regarding the spin-off 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 & Power and SGRE.
The new company will be a major player on the energy market, Siemens says, with a business volume of €30bn ($33.6bn) and over 80,000 employees.
Siemens’ Gas & Power unit that includes the struggling gas turbine business has long been underperforming and was seen as a drag on overall company results.
The move to carve out and spin off the unit is seen as a means to make Siemens nimbler, concentrate on its digital businesses, and avoid the structural problems its big US rival GE is facing. The transaction is a further step in the company’s ‘Vision 2020+’ strategy concept to gain structural efficiency.
“With Vision 2020+, we’re further sharpening Siemens’ focus and making our businesses faster and more flexible,” Kaeser explained.
“The success of Siemens’ businesses of the next generation will be determined by new factors. Breadth, size and a ‘one size fits all’ approach will be replaced by focus, speed and adaptability.”
Siemens Gas & Power currently comprises the conglomerate’s oil and gas, conventional power generation, power transmission and related service businesses.
It was not immediately clear what operational set-up the new unit will have, nor where it will be headquartered, but Kaeser said it will allow Siemens to provide “an optimized and, when necessary, combined range of offerings from a single source.”
Being independent from the parent company will enable Siemens Gas & Power to leverage its position of strength to support customers in rapidly changing energy markets, the unit’s chief executive Lisa Davis said.
“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,” Davis said.
Along with the spin-off of Siemens Gas & Power (including Siemens Gamesa), Siemens is stepping up efficiency measures and targets to cut €2.2bn in costs by 2023, including a €500m cost reduction already planned at Gas & Power.
The industrial giant aims to carry out roughly 10,400 efficiency-related workforce adjustments, but it also plans to create some 20,500 new jobs by 2023. Overall, that will result in a net increase of about 10,000 jobs worldwide, Siemens said.
Klaus Patzak, currently managing partner of the Siemens Portfolio Companies, has been appointed chief financial officer of the new Siemens Gas & Power business.
Patzak will be responsible for steering the activities required for carving out and listing, and helping to shape the format of the future stand-alone Siemens energy business. He will report directly to Lisa Davis.
It was yet unclear whether the position of Siemens Gamesa chief executive Markus Tacke will change as SGRE is transferred to the new energy company.
