Siemens AG to acquire 18% stake in Siemens Ltd for 2.1 bn euros

New Delhi: German conglomerate Siemens Aktiengesellschaft (Siemens AG) will acquire an additional 18 per cent stake in its India unit 2.1 billion euros (USD 2.28 billion), the company announced on Wednesday.

The move will help the firm raise its stake in the India unit, Siemens Ltd, to 69 per cent from 51 per cent at present, according to an official statement.

Siemens AG will acquire the stake from Siemens Energy, whose stake in Seimens Ltd will come down from 24 per cent to 6 per cent.

Siemens AG has taken measures to support the stability of Siemens Energy AG and accelerate separation in India, the statement said.

Specifically, Siemens intends to enter into a share purchase agreement with Siemens Energy to acquire an 18 per cent stake in Siemens Ltd (India) from Siemens Energy for 2.1 billion euros in cash, it said.

On the completion of this deal, Siemens Energy's stake in Siemens Ltd will decline from 24 per cent to 6 per cent, it added.

With the intended acquisition, Siemens and Siemens Energy will accelerate unbundling the business activities of the Indian subsidiary Siemens Ltd, the statement said.

The purchase price reflects a customary discount of 15 per cent on the five-trading-days volume-weighted average price before the day of signing, it stated.

"Together, we shaped a solution that is in the best possible interests of all parties and accelerates the separation of Siemens and Siemens Energy in India. Besides the immediate cash inflow, we are also enabling an additional line for customer guarantees, making a strong overall contribution to the future stability and growth of Siemens Energy," Roland Busch, President and Chief Executive Officer of Siemens AG, said.

"For our shareholders, the accelerated demerger of Siemens Ltd India's energy activities will further sharpen the portfolio focus of Siemens. It also simplifies and strengthens our corporate structure in India, a fast-growing and strategically important market." As part of the spin-off in 2020, Siemens and Siemens Energy did not separate their businesses in India as it was not feasible then.

As a next step, Siemens and Siemens Energy have agreed to propose to the Board of Directors of Siemens Ltd India a demerger of the energy business.

Siemens Energy is to ultimately acquire a controlling stake in the demerged energy business. The aim is to complete the demerger in 2025, earlier than planned, it stated.