Germany

Germany

Siemens to transfer SGRE stake to new Gas and Power spin-off

Siemens will transfer its 59% majority stake in Siemens Gamesa Renewable Energy (SGRE) to its gas and power unit, which will be untethered from its parent company and spun off in a public listing.

Siemens intends to hold a public listing for Siemens Gas and Power by September 2020
Siemens intends to hold a public listing for Siemens Gas and Power by September 2020

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The public listing is planned to take place before September 2020, subject to a decision made on the spin-off at an extraordinary shareholders’ meeting pencilled in for June 2020.

Siemens will retain a stake in the gas and power unit that will initially be "somewhat less than 50%", but "above the level of a blocking minority holding" for the foreseeable future.

It will also support the new company through its financial services unit and its existing sales network, Siemens said.

The move will see Siemens combine its conventional power generation portfolio – including oil and gas, power transmission and related service businesses – with its renewable energy holdings.

Siemens Gamesa will remain an independent company with a new majority owner, a Siemens spokesman explained. The spokesman added that there was no reason for Siemens Gamesa to be affected by the move.

Lisa Davis, CEO of Siemens Gas and Power, said: "Global electrification continues to be vital to economic and environmental progress around the world.

"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."

Siemens’ supervisory board unanimously approved the spin-off of the gas and power unit on 7 May.

A final decision on the spin-off and subsequent public listing will be made in June 2020.

Siemens Gas and Power’s board is completed by CFO Michael Becker and COO Tim Holt.

The parent company announced the appointment of a new Gas and Power CFO, Klaus Patzak, on 8 May.

Siemens stated that current CFO Becker "will continue in his current critical role within the Gas and Power business with responsibility for the finance operational activities of the Gas and Power operating company".

It is as yet unclear how the role will be split between Patzak and Becker.

Further decisions on the management of the new company will be made following its establishment, a Siemens spokesman advised.

Parent company

Meanwhile, the parent company will focus on digital industries (DI) and smart infrastructure (SI) in the future, Siemens said.

It expects the spin-off to help cut costs by about €2.2 billion by 2023, including €500 million from Gas and Power’s cost reduction programme that was announced in September 2018.

Siemens also anticipates a net increase of about 10,000 jobs worldwide by 2023. It expects to cut roughly 10,400 jobs by this date, but also to create about 20,500 new jobs, the company said.

Siemens’ president and CEO Joe Kaeser said: "This move will create a powerful pure player in the energy and electricity sector – an enterprise that encompasses the entire scope of the energy market like no other company."

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