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Siemens Energy launches $4.3 billion bid for remaining Siemens Gamesa stake

Siemens Energy launches $4.3 billion bid for remaining Siemens Gamesa stake

A model of a wind turbine with the Siemens Gamesa logo is displayed outside the annual general shareholders meeting in Zamudio, Spain, June 20, 2017. REUTERS/Vincent WestRegister now for FREE unlimited access to Reuters.comRegister

  • Siemens Energy bids 18.05 euros/share for 33% stake
  • Bid comes after operational problems at Siemens Gamesa
  • Deal could yield cost synergies of up to 300 mln eur

FRANKFURT, May 21 (Reuters) – Siemens Energy (ENR1n.DE) on Saturday launched a 4.05 billion euro ($4.28 billion) bid for the remaining shares in struggling wind turbine unit Siemens Gamesa (SGREN.MC), hoping to remove a complex ownership structure that has weighed on its shares.Siemens Energy said the 18.05 euros per share bid constitutes a premium of 27.7% over the last unaffected closing share price of Spanish-listed Siemens Gamesa of 14.13 euros on May 17. It is a 7.8% premium to Friday’s closing price.Siemens Energy has faced mounting shareholder pressure to seek control of Siemens Gamesa (SGRE), in which it owns 67%, a stake it inherited as part of a spin-off from former parent Siemens (SIEGn.DE).Register now for FREE unlimited access to Reuters.comRegisterThat stake has given Siemens Energy little influence to deal with product delays and operational problems at Siemens Gamesa. The group has issued three profit warnings in less than a year.”It is critical that the deteriorating situation at SGRE is being stopped as soon as possible, and the value-creating repositioning starts quickly,” said Joe Kaeser, Siemens Energy’s supervisory board chairman.This year, sources told Reuters that Siemens Energy was exploring options to acquire the remaining stake in Siemens Gamesa and a deal could materialise by summer. read more Siemens Energy said it plans to finance up to 2.5 billion euros of the transaction with equity or equity-like instruments, adding a first step could be a capital increase without subscription rights.The remainder would be financed with debt as well as cash on hand, Siemens Energy said, adding it aimed to delist Siemens Gamesa. Spanish stock market regulations allow that once ownership of 75% is reached.Full integration of Siemens Gamesa will simplify Siemens Energy’s structure and provide a more coherent business model that caters to legacy energy assets like coal, transition technologies such as gas, and renewable power sources.”This transaction comes at a time of major changes affecting global energy,” Siemens Energy Chief Executive Christian Bruch said. “Our conviction is that the current geopolitical developments will not lead to a setback to the energy transition.”Siemens Energy said the deal would lead to cost synergies of up to 300 million euros annually within three years of the full integration, mainly due to more favourable supply chain management, combined administration and joint R&D.The deal should close in the second half and is expected to achieve revenue synergies of a mid triple-digit million amount by 2030, the group said.($1 = 0.9470 euros)Register now for FREE unlimited access to Reuters.comRegisterReporting by Christoph Steitz and Ludwig Burger; Editing by Nick Zieminski, Daniel Wallis and David GregorioOur Standards: The Thomson Reuters Trust Principles. .

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Insurer LIC opens subscriptions for $2.7 bln IPO, India’s largest

Insurer LIC opens subscriptions for $2.7 bln IPO, India’s largest

MUMBAI, May 4 (Reuters) – State-owned Life Insurance Corp’s (LIC) $2.7 billion IPO, India’s largest, opened to subscriptions from retail and other investors on Wednesday following strong demand from anchor investors led by domestic mutual funds.The Indian government expects to raise the sum, just a third of its original target, from selling a 3.5% stake in the country’s top insurance company, giving it an initial value of $78.52 billion. read more The subscription, set to close on May 9, will offer a discount to employees and retail investors of 45 rupees per share. LIC policyholders will be offered a discount of 60 rupees per share.Register now for FREE unlimited access to Reuters.comRegisterThe price range for the issue has been set between 902 rupees and 949 rupees per share.After a reservation for employees and policyholders, the remaining shares will be allocated in a ratio of 50% to qualified institutional buyers, 35% to retail investors and 15% for non-institutional investors.The final IPO price will be determined after the subscription closes.LIC shares were trading in the “grey” market at a premium of 95 rupees, at around 1,044 rupees apiece.To drum up demand from retail investors, in addition to heavy advertising in local newspapers, some 1.2 million field agents were dispatched across India to woo many of LIC’s more than 250 million policyholders to buy the shares.Policyholders were also flooded with text messages earlier this year recommending they open an electronic stock holding account early so they can take part in the IPO. read more The 59.3 million shares set aside for anchor investors were subscribed at 949 rupees apiece. Norwegian wealth fund Norges Bank Investment Management and the government of Singapore joined the anchor book, along with several domestic mutual funds. read more The government had initially wanted to list LIC in the financial year that ended March 31 but chose to delay the sale after Russia’s invasion of Ukraine and the U.S. Federal Reserve’s interest rate tightening triggered a market rout.The 66-year-old company dominates India’s insurance sector, with more than 280 million policies. It was the fifth-biggest global insurer in terms of insurance premium collection in 2020, the latest year for which statistics are available.Register now for FREE unlimited access to Reuters.comRegisterReporting by Nupur Anand Editing by Jamie Freed and Mark PotterOur Standards: The Thomson Reuters Trust Principles. .