Siemens Energy has made a voluntary cash tender offer to acquire the almost 33% of shares in Siemens Gamesa that it does not already own.
The offer of €18.05 per share represents a premium of 27.7% to the last unaffected closing share price of Siemens Gamesa of €14.13 on 17 May, Siemens Energy said.
The company added that the offer price exceeds the six-month volume weighted average price of the Siemens Gamesa share prior to the date of this announcement, calculated in accordance with Spanish market practice and Spanish Takeover Regulations.
The audit firm PwC was the independent valuator to issue a valuation report in order to comply with Spanish rules on delisting.
Following a successful closing of the transaction, which is expected during the second half of the year 2022, Siemens Energy intends to pursue a delisting of Siemens Gamesa from the Spanish stock exchanges.
Siemens Gamesa currently trades as a member of the IBEX 35 index.
Siemens Energy said that with wind being a key driver of the global energy transition, Siemens Gamesa’s product and service offering forms an essential part of its long-term strategy.
“However, (Siemens Gamesa)’s recent financial performance issues, driven by operational challenges and industry-related headwinds and reflected in multiple profit warnings, increased the need for action,” the company said.
“The integration will support management’s efforts to resolve the current challenges at (Siemens Gamesa) by helping implement the necessary measures to stabilise the business and deliver on its full potential,” it added.
Siemens Energy said that, in particular, Siemens Gamesa will benefit from Siemens Energy’s “closer involvement into the day-to-day operations and its turnaround expertise, especially in the fields of manufacturing, supply chain, project and customer management”.
Siemens Energy supervisory board chair Joe Kaeser said: “The full integration of (Siemens Gamesa) is an important milestone for Siemens Energy’s positioning as a driver of the energy transition from fossil to sustainable energy solutions.
“This will benefit customers, employees, shareholders, and ultimately society. It is critical that the deteriorating situation at (Siemens Gamesa) is being stopped as soon as possible, and the value-creating repositioning starts quickly.
“The supervisory board strongly supports the Executive Boards plans for the integration of (Siemens Gamesa).”
Siemens Energy added that “together, Siemens Energy and (Siemens Gamesa) are best positioned to unlock the full growth potential in the industry and support customers in the energy transition”.
The combined group may benefit from expected cost synergies of up to about €300m a year within three years following the integration.
In addition, revenue synergies of a mid-triple-digit million euros amount are expected by the end of the decade, the company said.
Siemens Energy chief executive Christian Bruch said: “The integration of (Siemens Gamesa) is an important step on our strategic roadmap to lead the energy transition.
“As an integrated group with a more holistic offering, we will be even better positioned to support our customers on the way to a more sustainable future.
“This transaction comes at a time of major changes affecting global energy.
“Our conviction is that the current geopolitical developments will not lead to a setback to the energy transition. Accelerating renewables will play a key role in this journey.
“Joining forces with (Siemens Gamesa) will benefit both companies and all stakeholders.”
The funding of the acquisition is fully underwritten by Bank of America and JP Morgan.
Assuming a full acceptance of the offer, Siemens Energy intends to finance up to €2.5bn of the transaction value with equity or equity like instruments.
The remainder of the transaction would be financed with debt as well as cash on hand.
As a first step, equity may be offered without subscription rights, subject to market conditions.