Siemens to pay 1 bn euros to up stake in Indian arm

Siemens to pay 1 bn euros to up stake in Indian arm

Mumbai: Siemens AG will spend about €1 billion ($1.4 billion) to raise its stake in its booming Indian subsidiary Siemens Ltd, it said on Monday.

Siemens said in a statement on Monday it planned to raise its stake to 75% from about 55%, offering Rs930 per share or a 28% premium to Friday’s closing price.

“Siemens is expanding its stake with the aim of further developing its business in India," the statement said.

The offer sent Siemens Ltd shares up by more than 18% to Rs867 by 2:02 pm. Siemens shares fell 0.4% amid a 0.8% drop in the blue chip Dax index.

The conglomerate is enjoying strong growth in business in emerging markets, with new orders from India alone up 160% in the latest quarter, boosted by infrastructure and power technology demand.

Siemens Ltd India had revenue of around €1.5 billion and profit from operations of around €200 million in 2010.

The move follows that of Swiss rival ABB Ltd, which last year raised its holding in its Indian subsidiary to 75%, paying $1 billion for the stake.

Siemens said that pending regulatory approval, the offer is expected to open on 25 March and close on 13 April.

HSBC Securities and Capital Markets will manage the offer, the statement said.