Siemens AG plans to acquire an additional 18% stake in its India unit from Siemens Energy AG for €2.1 billion in cash
Siemens and Siemens Energy will jointly propose to the board of directors of the Indian subsidiary, Siemens Ltd., to separate the energy business by way of a demerger, according to a release.
This would increase Siemens' stake in the publicly listed India unit from 51% to 69%, while Siemens Energy's stake would decrease from 24% to 6%, it said. "With the intended acquisition, Siemens and Siemens Energy accelerate unbundling the business activities of the Indian subsidiary of Siemens."
The purchase price reflects a customary discount of 15% on the five-trading-days volume-weighted average price before the day of signing. Siemens will provide no new guarantees to Siemens Energy, the statement said.
Siemens Energy, created by spinning off gas and power business from the German company, is looking to shore up its finances to offset losses at its Gamesa wind business.
Shares of India-listed Siemens rose as much as 4.41% during the day to Rs. 3568.80 apiece on the NSE. It was trading 3.68% higher compared to a 0.93% advance in the benchmark Nifty 50 as of 11:59 p.m.
The stock has risen 25.57% on a year-to-date basis. The total traded volume so far in the day stood at 3.6 times its 30-day average. The relative strength index was at 58.23 as of 11:59 a.m.
Of 27 analysts tracking the company, 15 maintain a 'buy' rating, six recommend a 'hold', and six suggest to 'sell', according to Bloomberg data. The average of 12-month price targets implies an upside of 13.4%.
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