Siemens has unveiled plans to merge its wind energy generation business with mechanical drive unit Flender. The decision is a part of a two-stage strategy to reorganise and revamp its units within its Portfolio Companies (POC).
In the first stage, wind energy generation will become part of Flender GmbH, a company that Siemens acquired back in 2005. The unit is involved in the production of mechanical drive systems, which are used in wind turbines and for other applications in the power generation, mining, oil and gas and other sectors. In the statement, Siemens said: “This transaction will complete the company’s electrical and mechanical portfolio, making it an important tier-1 supplier to the wind power industry.” The combined firm is expected to have an annual revenue of around Euro 2 billion with a larger footprint across the globe.
In the second stage, the German conglomerate intends to spin-off and publicly list the merged unit. “The combined company will be a technology leader with a global presence, a competitive cost base and an attractive service business,” Siemens said. The shareholders of the company are scheduled to vote on the proposed plan in the next ordinary annual shareholders’ meeting in February 2021.
The news comes after Siemens recently stated that it would step up a cost savings programme to deal with the fall out from the ongoing COVID-19 pandemic. The German outfit is targeting savings of Euro 475 million by 2021, up Euro 165 milliob from earlier plans.
In the quarter ended March 2020, Siemens reported Euro 14.22 billion in revenues, a marginal decline from Euro 14.25 billion registered in the corresponding period in 2019. Adjusted EBITDA for the quarter ended March 2020 is down by 18 per cent to Euro 1.6 billion.