Siemens Ltd to Demerge Energy Business, Focusing on Core and Renewable Segments

Siemens Ltd announced on Tuesday its decision to demerge its energy business into a distinct listed entity, aligning with the strategic interests of its German parent company, Siemens AG. This move aims to streamline its focus on core businesses and address shareholder demands.

In December 2023, Siemens Ltd disclosed plans to spin off its energy division following requests from stakeholders. To facilitate this demerger, Siemens Energy sold an 18% stake in the Indian entity to Siemens AG for approximately 2.1 billion euros.

Originally, Siemens Energy was spun off and listed separately by the German engineering conglomerate in 2020. Following the demerger, Siemens Ltd will concentrate on technology-driven developments in infrastructure and industry sectors. Meanwhile, the power generation and renewable energy segments will fall under Siemens Energy India.

Shareholders of Siemens Ltd will receive one share of Siemens Energy India for every share they hold, according to the company’s statement.

CEO and Managing Director Sunil Mathur explained that the market dynamics and capital needs are significantly different for the energy and industrial businesses. The demerger will allow both companies to pursue specialized strategies and make independent capital allocation decisions.

This strategic shift comes as India anticipates a significant surge in power generation in fiscal 2025, the fastest growth since 2011-2012. Siemens AG is looking to invest in India, which is seeing extensive grid upgrades and electrification programs.