Siemens Ltd Demerger: Siemens AG to buy Siemens Energy’s stake for €2.1 billion
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“This would increase Siemens’ stake in the publicly listed Siemens Ltd India from 51% to 69%, while Siemens Energy’s stake would decrease from 24% to 6%. With the intended acquisition, Siemens and Siemens Energy accelerate unbundling the business activities of the Indian subsidiary of Siemens,” the company said in a statement.
The purchase price reflects a customary discount of 15% on the 5-trading-days volume-weighted average price before the day of signing.
As part of the spin-off in 2020, Siemens and Siemens Energy did not separate their businesses in India as it was not feasible at that time.
As a next step, Siemens and Siemens Energy have agreed to propose to the Board of Directors of Siemens Ltd. India is a demerger of the energy business. Siemens Energy is to ultimately acquire a controlling stake in the demerged energy business. The aim is to complete the demerger in 2025 – significantly earlier than previously planned, the company said.
Following the news, shares of Siemens Ltd rallied over 4% to the day’s high at Rs 3,566.50 on BSE.
“For our shareholders, the accelerated demerger of Siemens Ltd. India’s energy activities will further sharpen the portfolio focus of Siemens. It also simplifies and strengthens our corporate structure in India, a fast-growing and strategically important market,” said Roland Busch, President and Chief Executive Officer of Siemens AG.
September quarter shareholding pattern shows that Siemens Energy owned 24% stake in Siemens Ltd while Siemens International owned 47.70% in the company. The remaining 3.3% stake is owned by Siemens Metals Technologies, which is also a promoter group company.
Siemens has agreed with Siemens Energy’s indirect financial measures totaling one billion euros to allow third parties to arrange guarantees for Siemens Energy.
Firstly, Siemens allows Siemens Energy to use its 5% shareholding in Siemens Ltd. India, worth 750 million euros, as collateral for guarantees. If the collateral is drawn, Siemens has committed to buy up to 5% of shares in Siemens Ltd. India for 750 million euros. Secondly, Siemens grants payment deferrals at market conditions in the amount of 250 million euros, also to be used as collateral for guarantees, the company said.
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