Interface News reporter | Ma Yueran
Siemens Energy continues to downsize the wind power business.
On May 17th, Indian media Mint reported that Siemens Energy plans to spend $1 billion (about 72 percent)Com2uscryptoRMB 3.9 billion)Com2uscryptoThe valuation sells Siemens Gamesa's Indian wind power business. The company said it was part of its strategic move to address losses and achieve profit targets and that the decision was in line with its strategy of focusing on core markets in Europe and the US.
The company also said that the Indian market remains of strategic importance and will continue to fulfill its performance commitments in the region.
Siemens Gamesa India has annual revenue of $700m and is valued at $1 billion. Siemens Gamesa earned about 9.1 billion euros ($9.883 billion) in the fiscal year, according to data platform Statista,2023. On this basis, the Indian branch accounts for about 7% of its total revenue.
The sale has attracted initial interest from infrastructure and climate funds as well as strategic investors.
Potential buyers include Adani Renewable Energy (Adani Renewable Energy), Brookfield Energy conversion Fund (Brookfield Energy Transition Funds), Macquarie, Masdar and TPG Rise. Barclays, one of Britain's largest commercial banks, is overseeing the sale process.
The divestment is part of Siemens Energy's plan to fully integrate Siemens Gamesa and to address ongoing quality and operational challenges.
Earlier this month, Siemens Energy announced an overhaul of Siemens Gamesa, its troubled wind power division, including layoffs and new chief executives.
Jochen Eickholt, 62, will resign as chief executive and be replaced by Vinod Philip, 50, Siemens Energy said on its website on May 8.
Siemens Gamesa has launched comprehensive restructuring measures and steps to achieve double-digit operating margins with the goal of breaking even by 2026.
According to Siemens' plan, its onshore wind power business will focus on the European domestic market and the US market in the future; in other local markets, the company will be able to provide services in its new business only if it makes economic sense.
The most important task for offshore business is to increase production capacity. At present, its German Cuxhaven, Danish Aalborg and French Le Havre plants are running as planned.
Siemens Gamesa is a global wind power giant, formed by the merger of Siemens Wind Power and Gamesa in July 2016, headquartered in Zamudio, Spain.
In March this year, Bloomberg New Energy Finance released a ranking of the new installed capacity of global wind power manufacturers last year, which showed that Gomeisa dropped to the eighth place in the world. In 2022, Gomeisu ranked fifth on the list.
Since June last year, Siemens Gomeisa has been mired in a fan quality crisis. Siemens Energy said at that time that it would investigate Siemens Gomeisa's existing fan products and designs due to the rising failure rate of fan parts. About 15% of its installed 132 GW wind turbines will be affected by older components.
In order to achieve the target product quality of some land-based platforms, Siemens Energy will carry out quality maintenance and other related measures, which may cost more than 1 billion euros. Affected by this fan quality problem, Siemens Energy had expected a total loss of about 4.5 billion euros in fiscal year 2023.
In 2020, Siemens Energy was spun off from Siemens AG (hereinafter referred to as Siemens) and listed independently on the Frankfurt Stock Exchange in Germany, mainly related to the application of energy industry, power generation, renewable energy, transmission and new energy business.
In addition to Siemens Energy, Siemens has recently integrated its operations in India.
Siemens Ltd, the Indian subsidiary of Siemens AG, announced that its energy business would be spun off into a separate entity, Siemens Energy India Ltd. (Siemens energy India Limited), which will be listed on the Mumbai Stock Exchange (BSE) and the Indian National Stock Exchange (NSE), Power Technology5 reported on March 15.
Siemens will focus on industrial, infrastructure and mobile technologies; Siemens Energy India will focus on energy technologies, providing solutions throughout the energy value chain, including power generation, heating, transmission and storage, and its portfolio will combine traditional and renewable energy technologies such as gas and steam turbines, hydrogen-powered hybrid power plants, generators and transformers.
The spin-off and listing of Siemens Energy India is expected to be completed in 2025.
Interface News contacted Siemens Energy about the sale of its wind power business in India. As of press time, no more information was available.