Siemens all set to Sell its Drive Division to KPS Capital for US$3.25 Billion

Krishtina D'Silva Posted on: 2024-05-16 17:06:00 Viewer: 2,409 Comments: 0 Country: Germany City: Grafing bei Munchen

Siemens all set to Sell its Drive Division to KPS Capital for US$3.25 Billion

Munich, Germany (Urban Transport News): In a significant move impacting the industrial landscape, Germany's Siemens is set to offload its Innomotics large motors and drives division to financial investor KPS Capital Partners for a hefty sum of 3 billion euros ($3.25 billion). Sources familiar with the matter disclosed this development on Wednesday, adding that Siemens will formally announce the deal alongside its financial results on Thursday.

The decision to divest this division underscores Siemens' strategic realignment efforts, marking a significant step in reshaping its portfolio. Innomotics, headquartered in Nuremberg, Germany, and boasting a workforce of approximately 14,000 employees, has operated as a separate subsidiary of Siemens since July 2023.

The inception of Innomotics stemmed from Siemens' consolidation of its operations in low- to high-voltage motors, geared motors, medium-voltage converters, and motor spindles into a cohesive entity. This consolidation facilitated synergies in supplier relationships, customer networks, and technological advancements.

Siemens had previously articulated its intent to grant full autonomy to the Innomotics business, with sales exceeding 3 billion euros. The impending sale to KPS signifies a strategic pivot towards streamlining Siemens' operations and unlocking value for shareholders.

While KPS emerged victorious in the bidding process, it faced stiff competition from Japanese engine manufacturer Nidec. KPS Capital Partners, a renowned New York-based investment firm specializing in industrial investments, sees ample opportunities for acquisitions in the German market, as reported by Handelsblatt.

Siemens' divestment of Innomotics follows a series of strategic moves aimed at optimizing its portfolio. Previous divestitures include the sale of Yunex, a road traffic technology company, to Italy's Atlantia family for approximately a billion euros, and the sale of gearbox subsidiary Flender to financial investor Carlyle for over two billion euros.

As Siemens continues to navigate the evolving landscape of industrial innovation and investment priorities, the sale of its drive division signifies a pivotal moment in its strategic journey, potentially paving the way for renewed focus and growth in key areas such as green energy, energy security, and environmental sustainability.

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