German multinational conglomerate Siemens has outlined plans to spinoff and public list its gas and power (GP) business, as part of efforts to meet medium-term growth and profit targets.
Unanimously approved by Siemens’s supervisory board, the decision is part of the company’s Vision 2020+ strategy concept.
GP division includes the company’s oil and gas, conventional power generation, power transmission and related services businesses.
Siemens state that GP will be “given complete independence and entrepreneurial freedom through a carveout and a subsequent public listing (spinoff)”. The company also noted that the stock exchange listing is anticipated to happen by September 2020.
Additionally, Siemens is planning to give its 59% stake in renewable energies company Siemens Gamesa Renewable Energy (SGRE) to GP.
The company expects to make the decision regarding the spinoff and subsequent public listing at a shareholders’ meeting, which may be held in June 2020.
Following the decision, both the new GP and SGRE will be deconsolidated. The spinoff and transfer of SGRE stake will see the creation of a new company in the energy segment. It will have a business volume of €30bn and more than 80,000 employees.
Siemens president and CEO Joe Kaeser said: “This move will create a powerful pure play in the energy and electricity sector with a unique, integrated setup, an enterprise that encompasses the entire scope of the energy market like no other company.
“Combining our portfolio for conventional power generation with power supply from renewable energies will enable us to fully meet customer demand. It will also allow us to provide an optimised and, when necessary, combined range of offerings from a single source.
“We’re convinced that this strategic decision will be positive for all participants and enable long-term value creation for customers, employees and shareholders – as can also be seen in recent market successes such as those in Iraq, which we’ll jointly continue to pursue.”
The company revealed plans to reduce roughly 10,400 efficiency-related jobs at its core divisions. The planned structural efficiency gains are expected to result in savings of nearly €2.2bn by 2023.
At the same time, the German multinational conglomerate intends to create nearly 20,500 new jobs by 2023.