Siemens to demerge and list its energy business

livemint.com:

Energy, railways, data centres may drive Siemens’ growth Earlier, ABB India Ltd had structured the demerger of its power transmission business similarly, mirroring the shareholding of investors in the new entity before selling its stake to Hitachi. "Demerging the company and mirroring the shareholding of minority investors is a much cleaner way to do this transaction," said Shriram Subramanian, the managing director of proxy advisory firm InGovern. Siemens Ltd has earlier faced shareholder ire in India when the company proposed to sell its low-voltage motors and geared motors to group company Siemens Large Drives India Private Limited.

Shareholders had rejected the transaction after being dissatisfied with the ₹2,200 crore valuation. The valuation was arrived at and then certified by independent auditors. “In selling the business to the parent, investors could have concerns over valuation and the parent cannot vote on it given that it is a related party transaction.

Siemens Ltd has faced this issue in the past," Subramanian said. Also read: Siemens AG set to acquire 18% stake in Siemens via inter-se transfer at discounted rate of 21% In 2020, parent Siemens AG had demerged its energy business into Siemens Energy AG. However, in India, listed Siemens Ltd continued to hold the energy business vertical.

Last November, Siemens AG purchased 18% stake in Siemens Ltd from the new company Siemens Energy AG. In December, a new subsidiary Siemens Energy India Ltd was set up in preparation for the demerger in India. Over time, Siemens Energy AG will acquire a majority stake in Siemens Energy India Ltd, the company said.