- Siemens’ stock jumped more than 4.5% on Wednesday after it announced the spin off of its gas-and-power division and transfer of its renewable-energy business to the new company.
- The German industrial giant will retain a stake of 25% to 50% in the new entity, which will have annual sales of 27 billion euros ($US30 billion), more than 80,000 employees, and will aim to secure a stock-exchange listing by September 2020.
- “This move will create a powerful pure play in the energy and electricity sector…that encompasses the entire scope of the energy market like no other company,” Siemens CEO Joe Kaeser said in a press release.
- Watch Siemens trade live.
Shares in Siemens jumped more than 4.5% on Wednesday after it announced the spin-off of its ailing gas-and-power division and transfer of its 59% stake in its Siemens Gamesa renewable-energy business to the new company, allowing the German industrial giant to focus on growth sectors such as smart infrastructure and industrial automation.
Combining Siemens Gamesa with the gas-and-power division – which comprises oil and gas, conventional power generation, power transmission, and related-services businesses – will create an independent company with annual sales of 27 billion euros ($US30 billion) and more than 80,000 employees, Siemens’ management said in a press release.
Siemens will own between 25% and 50% of the new company, and support it with financial services, brand licensing, and access to its sales network. The new entity will aim to secure a stock-exchange listing by September 2020, according to the press release.
“This move will create a powerful pure play in the energy and electricity sector…that encompasses the entire scope of the energy market like no other company,” Siemens chief executive Joe Kaeser said in a press release. “Combining our portfolio for conventional power generation with power supply from renewable energies will enable us to fully meet customer demand.”
The spin-off will allow Siemens to focus on smart-infrastructure products such as fire-safety devices and energy-storage systems, as well as digital solutions such as industrial software and automation. The company expects its more efficient structure to save it 2.2 billion euros ($US2.5 billion) by 2023. It also predicts its focus on growth industries will create an additional 10,000 jobs worldwide, according to the press release.
Siemens’ turnover rose 4% to 41.1 billion euros ($US46.1 billion) in the six months to March 31, as higher sales of smart infrastructure, digital industries, healthcare technology, and renewable energy offset a 6% decline in gas and power revenues, according to the group’s half-year earnings report.
However, net income slumped 28% to just over 3 billion euros, largely because last year’s figures were boosted by 1.5 billion euros due to Siemens’ sale of its Osram shares and the transfer of its Atos shares to its pension trust.
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