Siemens to Merge Gas and Power Division with Wind Turbine Supplier SGRE

Siemens will spin off its struggling energy division and merge
it with separately listed wind turbine supplier Siemens Gamesa
Renewable Energy (SGRE), creating a new multi-technology global
energy powerhouse.

The German industrial giant this week announced a plan to create
and then publicly list a new energy company whose product range
will span oil and gas solutions, gas and steam turbines, on- and
offshore wind turbines, and transmission equipment.

The new company is expected to have 80,000 employees and annual
revenues of €30 billion ($33.6 billion). It will fold in SGRE,
the world’s third largest supplier of wind turbines last year,
trailing only European rival Vestas and China’s Goldwind,
according to data from Wood Mackenzie Power & Renewables.

SGRE was created two years ago through the merger of Siemens’
wind business and Spanish wind company Gamesa, as part of the
intense and ongoing consolidation being seen across the global wind
supply chain.

SGRE is based and stock listed in Spain, though Siemens holds a
59 percent stake in the company. In addition to its huge onshore
wind manufacturing and services business, SGRE is the dominant
player in the growing offshore wind market, with nearly twice the
market share of rival MHI Vestas, according to WoodMac.

The consolidation of Siemens’ various energy businesses
reflects a broader convergence of the energy industry, as utilities
and oil companies once thought of as being antagonistic towards
green energy increasingly embrace low-cost renewables. Hybrid
projects combining various generation technologies and energy
storage are becoming more common.

“Combining our portfolio for conventional power generation
with power supply from renewable energies will enable us to fully
meet customer demand,” Siemens CEO Joe Kaeser said in a statement
explaining the restructuring.
“It will also allow us to provide an optimized and, when
necessary, combined range of offerings from a single source.”

It was not immediately clear who would lead the new energy
company. Lisa Jackson, an American, is CEO of Siemens’ Gas and
Power unit. Markus Tacke, a German, leads SGRE.

New investments in e-mobility and energy storage

Siemens itself will transform around two future-minded divisions
that it sees playing a central role in the “Fourth Industrial
Revolution”: Digital Industries and Smart Infrastructure.

As such, Siemens intends to “intensify” its presences in
areas like electric-mobility infrastructure, distributed energy
systems, smart buildings and energy storage – while hiring 18,000
people in the two divisions over the next few years.

All told, Siemens expects the restructuring to create 20,500 new
jobs by 2023 while 10,400 existing jobs are lost.

The sweeping restructuring is another repudiation of the
conglomerate business model once embodied by Siemens and its rival
General Electric.

Having fallen on hard times, GE has also been spinning off and
divesting various divisions over the past year, although it has
chosen to hold onto its Power and Renewable Energy units and make
them a central pillar of its future strategy.

“Breadth, size and a ‘one size fits all’ approach will be
replaced by focus, speed and adaptability,” Kaeser said.

Siemens will contribute its full stake in SGRE to the new energy
company, which is expected to get its own stock listing by
September 2020.

Unusually for Siemens, it will not be the majority owner of the
new company, but it will remain an “anchor shareholder” – and
will support it through its sales network, the licensing of the
Siemens brand, and its Siemens Financial Services unit that helps
customers finance purchases.

Source: FS – GreenTech Media
Siemens to Merge Gas and Power Division with Wind Turbine Supplier SGRE