Siemens is to spin off its gas and power (GP) division and combine it with the majority stake it owns in its renewables unit Siemens Gamesa to establish a “focused energy powerhouse”.
The engineering giant confirmed the move yesterday, announcing that it would create a new “major player” in the energy sector with a top line of €30 billion (£25.75 billion).
The move forms a major part of Siemens’ ‘Vision 2020+’ strategy, a plan to refocus the business and make it more flexible.
“That’s how we’ll ensure sustainable success of our businesses in the age of the digital Fourth Industrial Revolution, in which these new factors are crucial to compete,” Joe Kaeser, president and chief executive at Siemens AG, added.
Siemens GP, which comprises the firm’s oil and gas, conventional power generation, power transmission and related services businesses, will be combined with the 59% stake Siemens has in Siemens Gamesa, its renewable energies-focused division.
This newly-formed business will have complete independence, however Siemens does intend to remain a “strong anchor shareholder” and hold a stake initially “somewhat less than 50%” and above the level of a blocking minority holding.
Siemens then intends to list the company by September 2020.
“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,” Kaeser said.
Lisa Davis, chief executive at Siemens GP, meanwhile said the deal would give it more “freedom and agility” to concentrate on the changing demands of customers involved in the energy transition.
“Global electrification continues to be vital to economic and environmental progress around the world, and 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,” she said.
Davis is to head the newly-created unit, however the company has confirmed that Klaus Patzak, currently managing partner at the Siemens Portfolio Companies, has been named as its CFO.
The plan comes at a time of mixed fortunes for both Siemens GP and Gamesa. The former last year posted a 76% slide in profit, while the latter recorded a 43% profit jump.