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Siemens seeks 15% discount on Siemens shares from Siemens Energy
Industry News- Nov 09,23
Siemens Energy is contemplating selling a significant portion of its 24% stake in Siemens Ltd to enhance liquidity, a move that has the preliminary approval of both companies.
Siemens AG is in negotiations with Siemens Energy to secure a discount on potential share purchases in their joint venture, Siemens Ltd, in India, according to three insiders. The sought-after discount is approximately 15%, with reference to recent trading prices of Siemens Ltd shares, which have surged significantly since 2020. Siemens Energy is contemplating selling a significant portion of its 24% stake in Siemens Ltd to enhance liquidity, a move that has the preliminary approval of both companies. However, formal terms have not been finalised, and discussions are ongoing. Siemens AG and Siemens Energy have refrained from commenting on the matter.
Siemens AG separated from Siemens Energy in 2020, but their joint venture in India, Siemens Ltd, remained intact. Siemens Energy presently owns a 24% stake in Siemens Ltd, while Siemens AG holds a majority 51% stake. Siemens Energy requires Siemens AG's consent to sell any shares in Siemens Ltd. Recent discussions about the potential stake sale have caused a slight decrease in Siemens Ltd shares, reducing the value of Siemens Energy's stake to 288 billion Indian rupees (approximately $3.46 billion).
Siemens Ltd's valuation stands significantly higher than industry averages, with an EV/EBITDA multiple of 39.6 times, compared to the 8.6 average for Siemens AG, peer companies like ABB and Siemens Energy, as well as the 12.5 times multiple for Indian stocks. Concurrently, Siemens Energy is pursuing substantial project-related guarantees, amounting to billions of euros, from the German government, banks, and Siemens AG, the latter of which maintains a direct 25.1% stake in Siemens Energy following the spin-off.
Source: moneycontrol.com
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