The German industrial giant intends to integrate its wind energy generation unit — which produces generators and components for direct-drive turbines — into its mechanical drive systems subsidiary, Flender.
It would then spin off the new company in a public listing, it announced alongside its results for the second quarter of its financial year.
Siemens explained the planned merger would “complete the company's electrical and mechanical portfolio, making it an important tier-one supplier to the wind power industry".
It expects Flender to have pro-forma annual revenue of about €2 million following the deal.
Horst Kayser, chairman of Siemens’ portfolio companies, said the merger would create a “one-stop-shop” for Siemens’ wind power customers.
The company’s shareholders will vote on the proposal at the next ordinary annual shareholders meeting in February 2021.
Siemens acquired Flender in 2005. It produces mechanical drive systems for wind turbines and other power generation sectors, including mining, and oil and gas. It also supplies gearboxes under the Winergy brand.
Siemens is also proceeding with its plan to transfer its 67.1% majority stake in wind turbine OEM Siemens Gamesa Renewable Energy (SGRE) to its gas and power unit, untether the new "Siemens Energy" unit, and spin it off in a public listing.
The German conglomerate will present the spin-off to analysts and investors at a Capital Market Day on 1 September 2020, subject to a decision made by shareholders on 9 July.