Siemens Energy AG to fully integrate Siemens Gamesa Renewable Energy business

On May 21, Siemens Energy AG (Munich, Germany) announced a voluntary cash tender offer to acquire all outstanding shares (approx. 32.9% of share capital) in Siemens Gamesa Renewable Energy S.A. (SGRE, Zamudio, Spain), which it does not already own. SGRE’s minority shareholders will be offered €18.05 per share in cash. Moreover, following a successful closing of the transaction, Siemens Energy intends to pursue a delisting of SGRE from the Spanish stock exchanges, where it currently trades as a member of the IBEX 35 index. The transaction is expected to close during the second half of 2022. 

With wind being a key driver of the global energy transition, SGRE’s product and service offering forms an essential part of Siemens Energy’s long-term strategy. However, SGRE’s recent financial performance issues, driven by operational challenges and industry-related headwinds reflected in multiple profit warnings, has increased the need for action. The integration will support management’s efforts to resolve the current challenges at SGRE by helping implement the necessary measures to stabilize the business and deliver on its full potential. In particular, SGRE will benefit from Siemens Energy’s closer involvement into the day-to-day operations and its turnaround expertise, especially in the fields of manufacturing, supply chain, project and customer management.

“The full integration of SGRE is an important milestone for Siemens Energy’s positioning as a driver of the energy transition from fossil to sustainable energy solutions,” Joe Kaeser, chairman of the Supervisory Board of Siemens Energy AG, says. “This will benefit customers, employees, shareholders and ultimately society. It is critical that the deteriorating situation at SGRE is stopped as soon as possible, and the value-creating repositioning starts quickly.”

“As an integrated group with a more holistic offering, we will be even better positioned to support our customers on the way to a more sustainable future.”

After full integration, Siemens Energy says the combined group may benefit from expected cost synergies of up to approximately €300 million p.a. within three years, and revenue synergies of a mid-triple-digit million amount in Euros are expected by the end of the decade. In addition, a successfully integrated Group will enable Siemens Energy to further strengthen and capitalize on its three strategic pillars, — low- or zero-emission power generation, transport and storage of electricity and reducing the CO₂-footprint and energy consumption in industrial processes) — and it will provide a one-stop-shop approach built on a stronger offering and unified customer coverage for stakeholders. The delisting of SGRE will also provide first steps to simplify processes and move towards a more streamlined corporate structure and leaner governance.

“The integration of SGRE is an important step on our strategic roadmap to lead the energy transition. As an integrated group with a more holistic offering, we will be even better positioned to support our customers on the way to a more sustainable future,” Christian Bruch, CEO of Siemens Energy, adds. “This transaction comes at a time of major changes affecting global energy. Our conviction is that the current geopolitical developments will not lead to a setback to the energy transition. Accelerating renewables will play a key role in this journey. Joining forces with SGRE will benefit both companies and all stakeholders.”

The offer of €18.05 per share in cash for all outstanding shares in SGRE represents a premium of 27.7% to the last unaffected closing share price of SGRE of €14.13 on May 17, 2022. The offer price exceeds the six-month Volume Weighted Average Price (VWAP) of the SGRE share prior to the date of this announcement, calculated in accordance with Spanish market practice and Spanish Takeover Regulations. Assuming a full acceptance of the offer, Siemens Energy intends to finance up to €2.5 billion of the transaction value with equity or equity-like instruments. The remainder of the transaction would be financed with debt as well as cash on hand.