Siemens to Spin Off Power Division: Reports
German engineering giant Siemens is planning to demerge its power business, including its 59% stake in its Spanish renewables division Siemens Gamesa, it emerged May 7.
CEO Joe Kaeser said that the conglomerate model was not necessarily successful and he would rather Siemens operated as a fleet of ships, not an oil tanker. The power spin-off would create a company with €30bn($33bn) in revenue, according to the Financial Times May 8, with Siemens remaining a "strong anchor shareholder." Flotation is set for next year.
He said the spin-off would create a "powerful pure play in the energy and electricity sector with a unique, integrated set-up – an enterprise that encompasses the entire scope of the energy market like no other company." It would also help Siemens to achieve €2.3bn in structural efficiency gains.
Siemens Gamesa said May 6 that it had become the world's first wind turbine manufacturer to secure investment grade rating. The company obtained a BBB- long-term credit rating, with positive outlook, from Standard & Poor’s (S&P), and a Baa3 outlook stable rating from Moody’s.
Siemens announced May 1 that it had won a slew of gas-fired turbine and other electricity-related contracts in Iraq, valued at $14bn. In doing so it had stolen a march on its US rival General Electric, another conglomerate, which had also been bidding.