Siemens AG’s Acquisition of 18% Stake in Siemens India
Siemens AG has announced plans to acquire an 18% stake in Siemens India from Siemens Energy for €2.1 billion in cash. This move is part of a strategic restructuring aimed at accelerating the unbundling of Siemens India’s energy activities.
Stake Increase and Portfolio Focus
Upon execution of the share purchase agreement, Siemens’ stake in Siemens India will increase from 51% to 69%. Concurrently, Siemens Energy’s stake will decrease from 24% to 6%. Roland Busch, President and CEO of Siemens AG, highlighted the benefits for shareholders, emphasizing that the accelerated demerger of Siemens India’s energy activities will enhance Siemens’ portfolio focus.
Purchase Price and Financial Measures
The purchase price reflects a customary discount of 15% based on the 5-trading-days volume-weighted average price. Notably, Siemens will provide no new guarantees to Siemens Energy as part of this transaction. The stock market responded positively to the announcement, with Siemens’ stock rising by 2% on the BSE.
Early Demerger and Financial Support
Siemens and Siemens Energy are moving forward with plans for an early demerger of Siemens India’s energy business. This demerger, slated for completion in 2025, represents an accelerated timeline compared to previous plans. To facilitate this process, Siemens has committed to indirect financial measures totaling €1 billion. These measures include allowing Siemens Energy to use its shareholding in Siemens India as collateral for guarantees and providing payment deferrals at market conditions.
The strategic acquisition and demerger initiatives underscore Siemens’ commitment to optimizing its corporate structure and focusing on key growth markets, particularly in the energy sector.
