Siemens Energy Makes EUR 4.04 Billion Siemens Gamesa Takeover Offer

Siemens Energy has launched a voluntary cash tender offer to acquire all outstanding shares in Siemens Gamesa Renewable Energy, or approximately 32.9 per cent of Siemens Gamesa’s share capital which it does not already own.

Siemens Gamesa/Illustration

The wind turbine manufacturer’s minority shareholders will be offered EUR 18.05 per share in cash, representing a premium of 27.7 per cent to the last unaffected closing share price of Siemens Gamesa of EUR 14.13 on 17 May 2022, Siemens Energy said.

The offer is valued at around EUR 4.04 billion in total.

Following a successful closing of the transaction, expected in the second half of 2022, Siemens Energy intends to pursue a delisting of Siemens Gamesa from the Spanish stock exchanges, where it currently trades as a member of the IBEX 35 index.

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Siemens Energy said that Siemens Gamesa’s product and service offering forms an essential part of the company’s long-term strategy. However, Siemens Gamesa’s recent financial performance issues, driven by operational challenges and industry-related headwinds and reflected in multiple profit warnings, increased the need for action, Siemens Energy said.

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The integration is expected to support management’s efforts to resolve the current challenges at Siemens Gamesa by helping implement the necessary measures to stabilize the business and deliver on its full potential. In particular, Siemens Gamesa is expected to benefit from Siemens Energy’s closer involvement into the day-to-day operations and its turnaround expertise, especially in the fields of manufacturing, supply chain, project, and customer management.

”The full integration of SGRE is an important milestone for Siemens Energy’s positioning as a driver of the energy transition from fossil to sustainable energy solutions,” said Joe Kaeser, Chairman of the Supervisory Board of Siemens Energy AG.

”This will benefit customers, employees, shareholders, and ultimately society. It is critical that the deteriorating situation at SGRE is being stopped as soon as possible, and the value-creating repositioning starts quickly. The Supervisory Board strongly supports the Executive Boards plans for the integration of SGRE.”

After full integration, the combined group may benefit from expected cost synergies of up to around EUR 300 million within three years, Siemens Energy said, and will mainly result from better supply chain and logistics costs, aligned project execution, joint and integrated R&D efforts, as well as cost reductions through an optimized administrative setup.

In addition, revenue synergies of a mid-triple-digit million EUR amount resulting from a joint go-to-market approach and combined offerings.are expected by the end of the decade.

”As an integrated group with a more holistic offering, we will be even better positioned to support our customers on the way to a more sustainable future,” said Christian Bruch, CEO of Siemens Energy.

”This transaction comes at a time of major changes affecting global energy. Our conviction is that the current geopolitical developments will not lead to a setback to the energy transition. Accelerating renewables will play a key role in this journey. Joining forces with SGRE will benefit both companies and all stakeholders.”

The funding of the acquisition is fully underwritten by Bank of America and J.P. Morgan. Assuming a full acceptance of the offer, Siemens Energy intends to finance up to EUR 2.5 billion of the transaction value with equity or equity-like instruments. The remainder of the transaction would be financed with debt as well as cash on hand. As a first step, equity may be offered without subscription rights, subject to market conditions, Siemens Energy said.

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