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Siemens to Sell Innomotics to KPS Capital Partners for $3.8 Billion — Update

By Adria Calatayud


Siemens agreed to sell its Innomotics large motors business to private-equity firm KPS Capital Partners for 3.5 billion euros ($3.81 billion), including debt, the latest move by the German industrial giant to reshuffle its portfolio.

Europe's largest industrial company has been looking to simplify its sprawling operations in recent years. It listed separately its energy and health technology units, Siemens Energy and Siemens Healthineers, and offloaded smaller businesses such as Flender and its mail-and-parcel logistics unit.

Industrial companies worldwide have been taking steps to shrink their footprints to sharpen their focus. In the U.S., General Electric in 2021 decided to split into three publicly traded companies, as did chemical conglomerate DowDuPont.

Some investors apply so-called conglomerate discounts to companies that own businesses in different sectors, which means the sum of the parts as a whole is less valuable than the individual parts.

Siemens had previously said Innomotics was the last major asset in its portfolio companies segment, where it houses businesses that are divestment candidates. Siemens's industrial business now spans digital industries, smart infrastructure and mobility.

Last year, the group carved out Innomotics and said it would start preparations for a potential public listing.

Siemens expects to book a gain of about EUR2 billion from the sale, Chief Executive Roland Busch said on a conference call on Thursday.

KPS separately said the price of the deal is on an enterprise value basis, including debt.

KPS Co-Founder and Co-Managing Partner Michael Psaros said Innomotics is poised to benefit from trends such as electrification, energy efficiency, digitalization, urbanization and the commercialization of new energy resources such as hydrogen.

Innomotics makes about EUR3.3 billion in annual revenue and employs around 15,000 people, Siemens said.

Siemens expects the deal to close in the first half of fiscal 2025, which ends in March next year, but said completion is subject to customary foreign-investment and merger control approvals.

News of the sale came as Siemens cut guidance for its closely watched digital industries unit in the year to September, citing a slower-than-expected recovery in its China automation operations, but raised its forecast for the smart infrastructure division.

At 0712 GMT, Siemens shares traded 1.7% lower at EUR184.60.

Siemens now projects digital industries comparable revenue to fall by 4% to 8% in fiscal 2024, against previous expectations for a rise of up to 3%, and lowered its forecast for the division's profit margin to 18%-21% from 20%-23%.

The company said its group-level outlook for fiscal 2024 remains unchanged, with comparable revenue growth still expected at 4% to 8%.

For the quarter to March, the company made a net profit of EUR2.03 billion, compared with EUR3.48 billion for the same period last year.

Revenue fell to EUR19.16 billion from EUR19.42 billion, with declines in its digital industries and mobility divisions offsetting a rise in smart infrastructure.

Analysts had expected Siemens to report net profit of EUR1.67 billion on revenue of EUR19.28 billion, according to consensus estimates compiled by the company.


Write to Adria Calatayud at


(END) Dow Jones Newswires

May 16, 2024 03:43 ET (07:43 GMT)

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