In an attempt to make the vast Siemens conglomerate leaner, Siemens chief executive Joe Kaeser last month announced the company will transfer the 59% it owns in SGRE to Siemens’ Gas & Power unit — which in turn will be carved out and spun off as an independent company publicly listed 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 stake 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.”

It will also ensure that Siemens won’t have to deal with its struggling gas-turbine business, which has long been underperforming and was seen as a drag on overall company results. The unit also includes the conglomerate’s oil and gas, power transmission and related service businesses.

Siemens’ 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. Adding SGRE to Gas & Power will make it more attractive to future investors.

A final decision on the spin-off and subsequent public listing is to be made at an extraordinary shareholders’ meeting, probably in June 2020. It is possible that Siemens shareholders might not approve of the deal, but a senior Siemens spokesman Alfons Benzinger told Recharge: “We are very confident that the required majority will be reached amongst our shareholders.”

The new company will be a major player on the energy market, Siemens says, with a business volume of €30bn ($33.6bn) and more than 80,000 employees.

The location of Gas & Power’ headquarters — currently in Houston, Texas — will be determined during the carve-out and listing process, Benzinger tells Recharge.

SGRE is currently based in the Basque region of Spain, where Gamesa was headquartered.

“We have no reason to believe that the management will change its strategy including its regional footprint,” Benzinger said. But that doesn’t guarantee what may happen once Siemens is no longer the majority shareholder in SGRE. The future owners may have very different ideas about what to do with the OEM.

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