Siemens AG to acquire 18% stake in Indian JV for discounted price of ₹18,968 crore

Siemens AG on November 15 said it is planning to purchase an 18 percent stake in the Indian joint venture, Siemens Limited, from Siemens Energy, Reuters reported.

The proposed acquisition is valued at ₹18,968 crore (2.1 billion euros or $2.28 billion) and represents a discount of 15 percent based on the average price, it added.

In a statement, Siemens AG confirmed their decision, stating, "The purchase price reflects a customary discount of 15 percent on the 5-trading-days volume-weighted average price before the day of signing."

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This aligns with a previous Reuters report on October 31, which highlighted Siemens AG's pursuit of a discounted acquisition.

Plan in the works

Siemens Energy was contemplating selling a portion of its 24 percent stake in the Indian-listed Siemens back to its former parent company, Siemens AG, as a move to strengthen its financial position, two sources told Reuters in October.

The current value of this stake stands at approximately $3.4 billion. A potential partial sale is seen as a swift measure by the German manufacturer of wind and gas turbines to reinforce its capital base. This step comes amidst ongoing discussions with Berlin and Siemens regarding guarantees for performance bonds.

Siemens AG presently holds a 51 percent stake in Siemens, and an increase in this ownership could be a strategic manoeuvre, reportedly easier to justify to its shareholders than providing assurances to Siemens Energy, as indicated by one source.

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This comes as Siemens Energy is engaged in talks with the German government, financial institutions, and Siemens itself, aiming for 15 billion euros in guarantees to safeguard substantial industrial projects.

Sources previously disclosed to Reuters that Siemens Energy is exploring measures to strengthen its financial position, including potential further asset sales, subsequent to a recent deal to sell its Trench high voltage component division to Triton.