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Siemens To Boost Stake In Indian Joint Venture With €2.1 Billion Acquisition From Siemens Energy

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The strategic purchase comes at a discounted rate, with a 15 percent reduction applied to the average price—consequently, Siemens AG’s ownership in Siemens Ltd. India will rise significantly from 51 percent to 69 percent, while Siemens Energy’s stake will diminish from 24 percent to 6 percent.

Siemens AG is poised to invest significantly in its Indian joint venture, Siemens Ltd. The company has announced its intention to acquire an 18 percent stake from Siemens Energy in Siemens Ltd for €2.1 billion ($2.28 billion). This acquisition comes at a discounted price, 15 percent below the average price over the five trading days preceding the agreement. This strategic move aligns with Siemens AG’s efforts to support the stability of Siemens Energy AG and expedite the separation process in India, aiming to benefit all parties involved. 

The backdrop of this development includes Siemens Energy AG’s recent agreement with the German government, which holds a significant stake in Siemens AG. This deal, valued at €15 billion, was orchestrated to address financial challenges faced by Siemens Energy’s wind turbine unit. As confirmed by Germany’s Economy Ministry, private banks have committed to providing €12 billion in loan guarantees, backed by €7.5 billion in government counter-guarantees. The funding arrangement also involves another €3 billion contributed by other stakeholders, including Siemens AG. As part of this contribution, the companyis set to acquire a portion of Siemens Energy’s stake in a listed Indian affiliate for approximately €2 billion. The company is further committed to covering a €1 billion first-loss tranche for the banks’ loan guarantees, as stipulated by the government.

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This strategic move will result in Siemens AG’s ownership of a larger share in Siemens Ltd. India, increasing its stake from 51 percent to 69 percent. Concurrently, Siemens Energy’s stake in the joint venture will decrease from 24 percent to 6 percent. The transaction reflects the commitment of both companies entities to streamline their business activities in India and accelerate the unbundling process. The company clarified that no new guarantees will be extended to Siemens Energy as part of this arrangement. Financial markets have reacted positively to this news, with shares of Siemens India trading up by 3 percent as of 12:20 pm, while benchmark indices registe red an approximately 0.9 percent increase. This strategic move represents a significant step in the evolution of Siemens AG’s presence and influence in the Indian market, with potential implications for the broader energy and technology sectors.

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