By Kim Richters
Siemens AG on Tuesday said it would spin off 55% of is energy operations to shareholders as part of a long-awaited plan to list the business in late September.
The German engineering conglomerate said shareholders will receive one Siemens Energy share for every two Siemens shares they hold. While divesting the majority, Siemens will hold a 35.1% stake in Siemens Energy directly, with the rest controlled by its pension unit.
The listing of the business, which includes its gas and power operations as well as its 67% stake in wind-turbine maker Siemens Gamesa Renewable Energy SA, is scheduled for Sept. 28. It will be managed separately and independently from Siemens, the company said.
Siemens expects to further reduce its stake in the business "significantly" in the 12 to 18 months after the listing.
The move is part of Siemens Chief Executive Joe Kaeser's plan to transform the company from an industrial conglomerate into a smaller business. Mr. Kaeser has also overseen the spinoffs of Siemens Healthineers AG and Siemens Gamesa. He is scheduled to step down as CEO next year.
Siemens Energy, which has over 90,000 employees, plans to pay annual dividends in the range of 40% to 60% of the company's net income. It doesn't plan to pay a dividend for fiscal 2020.
Siemens said the combined energy business had a revenue of 28.80 billion euros ($31.37 billion) in fiscal 2019, while adjusted earnings before interest, taxes and amortization would be have been around EUR1.3 billion if EUR300 million in severance charges were excluded.
After completing the spinoff, Siemens will focus on its Digital Industries, Smart Infrastructure and Siemens Mobility businesses, it said.
"Turning Siemens' energy business into an independent company is a key milestone in the successful execution of our Vision 2020+ strategy program," Joe Kaeser said in a statement.
"The considerable increase in the value of our health-care business shows the huge potential we can tap by further sharpening the focus of our company."
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