Siemens announces plan to separate its energy divison

Siemens has announced it is to spin out its power and gas business, unveiling plans to create a new company boasting over 80,000 employees and 'business volumes' of around €30bn.

Confirming recent reports, the company announced yesterday that its Siemens' Gas and Power (GP) division - comprising the company's oil and gas, conventional power generation, power transmission and related services businesses - will be given "complete independence and entrepreneurial freedom through a carveout and a subsequent public listing".

In addition, Siemens AG will hand its majority stake in renewable energy company SGRE - which currently stands at 59 per cent - to the new company.

A stock exchange listing is now slated for September 2020.

Siemens said it will give up its majority stake in GP, but will retain a "strong anchor shareholder in the new company, with a stake that is to be initially somewhat less than 50 per cent and, for the foreseeable future, above the level of a blocking minority holding".

"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 Joe Kaeser, president and CEO of Siemens AG. "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."

Siemens's gas and power unit had the lowest profit margin of all the firm's divisions last year, according to company figures, after its performance was hit by reduced demand for gas turbines across the market.

Siemens wind business, Siemens Gamesa Renewable Energy, develops wind farms and makes renewable energy equipment. It took its current shape in 2017 when Siemens merged its wind business with Spanish rival Gamesa to create one of the world's largest wind energy specialistsinf.