Siemens AG seeks discount for Siemens Energy’s stake in Indian JV – sources

By Andreas Rinke, Emma-Victoria Farr, Christoph Steitz and Alexander Hübner

BERLIN/FRANKFURT/MUNICH (Reuters) – Siemens AG is seeking a discount from Siemens Energy for any possible purchases of shares in their Indian joint venture Siemens Ltd, three people familiar with the matter said.

Siemens AG hopes for a discount of around 15%, two of the people said, with one of them saying the discount would be from where shares in Siemens Ltd have been trading in recent months. The source pointed to the asset’s high valuation, which has more than doubled since 2020.

Siemens Energy is weighing the sale of a substantial part of its 24% stake in Siemens Ltd, in which Siemens AG already owns 51%, as one way to boost liquidity, sources said last week.

While both companies in principle agree that a deal makes sense, talks are ongoing and no terms have yet been agreed, the people said.

Siemens and Siemens Energy both declined to comment.

Siemens AG spun off Siemens Energy in 2020 but Siemens Ltd, the Indian division which comprises business of both groups, remained integrated.

Under an ownership agreement between the two groups, Siemens Energy cannot sell any shares in Siemens Ltd without the consent of Siemens AG.

Since talks about a possible deal became public, Siemens Ltd shares have lost around 2%, giving Siemens Energy’s stake a value of 288 billion Indian rupees ($3.46 billion).

At an EV/EBITDA multiple of 39.6 times, Siemens Ltd dwarfs the 8.6 average for Siemens AG, peer ABB and Siemens Energy as well as the 12.5 times for Indian stocks.

Discussions around a stake sale in Siemens Ltd come as Siemens Energy is seeking billions of euros in project related guarantees from the German government, banks and Siemens AG, which retains a direct 25.1% stake following the spin-off.

Shares in Siemens Energy, which fell to a record low on Oct. 26 after talks about the guarantees were disclosed, is currently worth 7.55 billion euros ($8.11 billion).

($1 = 83.2125 Indian rupees)

($1 = 0.9306 euros)

(Reporting by Andreas Rinke, Emma-Victoria Farr, Christoph Steitz and Alexander Huebner; Editing by Anousha Sakoui and Christina Fincher)

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