Siemens Announces Carve-Out Of Gas & Power Business
Germany-based technology powerhouse Siemens AG announced on Tuesday it intends to carve out its Gas and Power division to create a “new major player on the energy market” which will start out life with business volume of €30 billion and over 80,000 employees.
The move will also see the new independent company acquire Siemens’ full stake in global offshore wind energy giant Siemens Gamesa Renewable Energy.
“With Vision 2020+, we’re further sharpening Siemens’ focus and making our businesses faster and more flexible,” said Joe Kaeser, President and CEO of Siemens AG. “These changes are laying the foundation for sustainable economic success in growth markets that will be attractive over the long term. We’re also creating solid perspectives for those businesses that have to prove themselves in the structural transformation now underway and address new growth fields.
“The success of Siemens’ businesses of the next generation will be determined by new factors. Breadth, size and a ‘one size fits all’ approach will be replaced by focus, speed and adaptability. 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 a crucial to compete.”
The move was unanimously approved by the company’s Supervisory Board Tuesday: “It’s the right thing to do; it’s necessary and courageous to trigger the planned changes when the company is doing well,” said Jim Hagemann Snabe, Chairman of the Supervisory Board of Siemens AG. “The Supervisory Board supports the Managing Board in the further implementation of the Vision 2020+ strategy concept under Joe Kaeser’s leadership.”
Siemens itself will continue into the future focusing on its Digital Industries (DI) and Smart Infrastructure (SI) Operating Companies, supplemented by company-wide technology and service units and the company’s strategic majority stake in Siemens Healthineers.
Siemens’ Gas and Power — which comprises all the company’s oil and gas, conventional power generation, power transmission, and related services businesses — will be given complete independent and entrepreneurial freedom through a carve-out and a subsequent public listing (spinoff). In addition, Siemens AG will transfer its 59% stake in Siemens Gamesa Renewable Energy.
“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,” explained Kaeser. “Combining our portfolio for conventional power generation with power supply from renewable energies will enable us to fully meet customer demand. It will also allow us to provide an optimized and, when necessary, combined range of offerings from a single source.
“We’re convinced that this strategic decision will be positive for all participants and enable long-term value creation for customers, employees and shareholders – as can also be seen in recent market successes such as those in Iraq, which we’ll jointly continue to pursue.”
“Being independent will enable us to more effectively leverage our position of strength to further support our customers in rapidly changing energy markets,” added Lisa Davis, CEO of Siemens’ Gas and Power. “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. We’ll now have more freedom and agility to be able to concentrate fully on the highly specific and quickly changing requirements of our markets and customers. In addition, we’ll be able to more directly control our costs and ensure that our stakeholders benefit directly from every euro we spend.”
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