Siemens carves out energy unit, cuts 10000 jobs in massive overhaul

Siemens unveils Siemens Gamesa share shake-up

Siemens unveils Siemens Gamesa share shake-up

Siemens is spinning off its gas and power business, which has dragged on the German engineering firm's performance as the rise of renewable power hits demand for gas turbines.

Michael Becker, the current CFO of the Gas and Power division will stay in his role and oversee the operational side of the business which comprises oil and gas, conventional power generation and power transmission. "In a joint venture, for example with a Japanese competitor, we would have seen that at great risk", she added.

In addition, Siemens AG plans to contribute its majority stake in the market-leading renewable energies company SGRE - now 59 percent - to Gas and Power. Siemens also plans to support the new company through its professional financial services and its regional sales networks, as well as through "the licensing of the powerful Siemens brand". Mitsubishi Hitachi Power Systems followed with 30 per cent, while Siemens was third with 26 per cent.

Gas and power was once an earnings driver for Siemens before a collapse in orders. "Siemens Mobility is also to be further strengthened as a growth business", the company said. The Munich-based company in 2017 announced more than 6,000 job cuts at the unit and closed several sites.

Mr Kaeser said the move will create a player 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". The company's stake will initially be somewhat less than 50 percent and, for the foreseeable future, above the level of a blocking minority holding.

"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". It will also allow us to provide an optimized and, when necessary, combined range of offerings from a single source.

Its separation and planned listing is expected to form the bulk of Siemens's presentation to shareholders and analysts at a capital markets day on Wednesday, when the company also reports second-quarter earnings.

"The decision on the carve-out of gas and power was anything but easy", said Juergen Kerner, who represents the IG Metall labor union on Siemens's supervisory board.

The spinoff will put Siemens' Digital Industries (DI) and Smart Infrastructure (SI) divisions as its core.

At the same time, Siemens plans to create 20,500 jobs by 2023, resulting in a net increase. "The division is one of Siemens's core businesses, but a growth strategy under Siemens is still not feasible".

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