Siemens To Demerge Energy Business Into Separate Listed Entity

India’s Siemens Ltd. said its board approved to demerge the company’s energy business into a separate listed entity, Siemens Energy India Ltd., to focus on the core portfolios.

Shareholders of Siemens will receive one share of Siemens Energy India for each share held in the company as per the scheme of arrangement, Siemens said in a stock exchange announcement.

Siemens Energy India, currently a wholly owned subsidiary of Siemens, will subsequently be listed on the BSE and National Stock Exchange of India, it added.

Siemens’ Managing Director and Chief Executive Officer Sunil Mathur said the underlying market drivers and capital allocation requirements are fundamentally different in the energy business compared to the industrial business.

The company said the demerger will lead to the creation of two strong and independent entities, which are able to better address their respective markets and customers with a more focused approach.

“The demerger will enable both companies to pursue their specific strategies, focus on their core portfolios and take decisions on capital allocation,” Mathur said. “This will enable the full value of each of the businesses to be unlocked for the benefit of the shareholders.”

The turnover of the energy business (excluding other operating revenues) stood at 5,986.9 crore rupees ($717 million) in FY23, representing 34% of the total turnover of the company.

THE FUTURE

Siemens said it will continue to be a technology-focused company in industry, infrastructure and mobility, while Siemens Energy India will focus on being the energy technology company supporting its customers in transitioning to a more sustainable world.

Siemens Energy India will provide solutions across the entire energy value chain – from power and heat generation, transmission to storage through a portfolio that includes conventional and renewable energy technology such as gas and steam turbines, hybrid power plants operated with hydrogen as well as power generators and transformers, according to the statement.

The process of demerger, including receipt of requisite approvals, and subsequent listing of Siemens Energy India is expected to be completed in 2025.

Note: $1 = 83.5185 Indian rupees

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