German industrial giant Siemens is to integrate its wind business with its mechanical drive unit Flender and spin-off the merged entity.
The company said on Friday it has developed a two-stage strategy for the plan that it believes will improve its offering as a systems supplier for the wind business.
First, the wind energy generation business, which produces generators and components for direct drive turbines, will be integrated with Flender to create an 8500-strong unit with around €2bn in revenue.
The second step will be to publicly list Flender by spinning off the company.
Shareholders will vote on the proposal at an annual meeting in February 2021, said Siemens.
“With this move, we’ll be improving our offering as a systems supplier for the wind power industry, an ecologically and economically important sector currently undergoing a major technological transformation,” said Roland Busch, chief technology officer.
Busch added that the portfolio companies have been operating with greater entrepreneurial freedom since April 2019 as part of a strategy to allow each unit to tap its full potential.
“The fully consolidated units are no longer in the red and are on track for growth,” he added.
The news came as Siemens said it would step up a cost savings programme to deal with the fall out from the ongoing COVID-19 pandemic.
The German outfit is targeting savings of €475m by 2021, up €165m from earlier plans.
Adjusted EBITDA for its fiscal second quarter between January and March was down 18% to €1.6bn.