Siemens Energy makes $4.28 billion bid for Siemens Gamesa

FRANKFURT Reuters- Siemens Energy launched a 4.05 billion euro $4.28 billion bid for the remaining shares in the struggling Wind turbine unit Siemens Gamesa, hoping to remove a complex ownership structure that has weighed on its shares.

Siemens Energy said the 18.05 euros per share bid represents a premium of 27.7% over the last unaffected closing share price of Spanish-listed Siemens Gamesa of 14.13 euros on May 17. It is a 7.8% premium over Friday's closing price.

Siemens Energy is facing shareholder pressure to take control of Siemens Gamesa SGRE, a stake it acquired from Siemens as part of a spin-off.

Siemens Energy has little influence on product delays and operational problems at Siemens Gamesa, because of the stake. The group has issued three profit warnings in less than a year.

Joe Kaeser, Siemens Energy's supervisory board chairman said it is important that the deteriorating situation at SGRE is stopped as soon as possible, and that value-creating repositioning starts quickly.

According to sources, Siemens Energy was exploring options to acquire the remaining stake in Siemens Gamesa this year, and a deal could be made by the summer.

The first step could be a capital increase without subscription rights, as Siemens Energy plans to finance up to 2.5 billion euros of the transaction with equity or equity-like instruments.

The remainder would be financed with debt and cash on hand, according to Siemens Energy, who said it was aiming to delist Siemens Gamesa. Spanish stock market regulations allow ownership of 75% of the stock market to be reached.

The integration of Siemens Gamesa will simplify Siemens Energy's structure, and provide a more coherent business model that caters to legacy energy assets like coal, transition technologies, such as gas, and renewable power sources.

This transaction comes at a time of major changes affecting global energy, according to Christian Bruch, Siemens Energy Chief Executive. We are convinced that the current geopolitical developments will not lead to a setback to the energy transition. Siemens Energy said the deal would lead to cost synergies of up to 300 million euros annually within three years of the full integration, mainly due to more favorable supply chain management, combined administration and joint R&D.

The deal is expected to achieve revenue synergies of a mid triple-digit million amount by the year 2030, the group said.