Siemens AG, a German
global technology giant, announced plans to engage into a share purchase agreement with Siemens Energy to buy an 18% shareholding in Siemens Ltd. India from Siemens Energy for a
cash purchase price of 2.1 billion euros.
This would increase Siemens’ stake in the publicly listed Siemens Ltd. India from 51% to 69%, while Siemens Energy’s stake would decrease from 24% to 6%, as per economic times.
“With the intended acquisition, Siemens and Siemens Energy accelerate unbundling the business activities of the Indian subsidiary of Siemens,” the company said, adding that the purchase price reflects a customary discount of 15% on the 5-trading-days volume-weighted average price before the day of signing.
Siemens Energy will not get any additional guarantees from Siemens.
“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,” said Roland Busch, President and Chief Executive Officer of Siemens AG, adding that 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.”.
Siemens has also agreed with Siemens Energy on €1 billion in indirect
financial measures to allow third parties to offer guarantees for Siemens Energy. Siemens Energy will be able to utilize its 5% stake in Siemens India, valued at €750 million, as collateral for guarantees. If the collateral is drawn, the parent has agreed to purchase up to 5% of the India unit for the stated sum.
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