Siemens is set to spin off 55% of its power business to its shareholders on 28 September, the company said on Tuesday.
The German engineering group then wants to “significantly” reduce its remaining 45% position within 12 to 18 months after the spin off date, Siemens said, revealing the details of the separation it announced a year ago.
In what is set to be one of the biggest IPOs this year, Siemens shareholders are to automatically receive one share of Siemens Energy for every two shares of Siemens.
Siemens is spending around €110m to release the energy business and focus on industrials and its transport business.
Over the last decade Siemens shares have gained 38%, markedly less than the 83% gain of the industrial sector, as weaker divisions such as power have dampened overall performance, the company said.
Siemens previously separated hospital equipment business Siemens Healthineers, whose stock has risen 37% since the split in March 2018.
“Issuance of the spin-off report marks another key milestone in the creation of an independent, world-leading energy pure play,” it said in a statement.
Siemens president and chief executive Joe Kaeser said: “Turning Siemens’ energy business into an independent company is a key milestone in the successful execution of our Vision 2020+ strategy programme.
“The considerable increase in the value of our healthcare business shows the huge potential we can tap by further sharpening the focus of our company.”
Kaeser added: “This applies to both Siemens Energy and the ‘New Siemens,’ which is concentrating on our industrial businesses.
“We’ve now reached a major milestone in the overall realignment that is preparing the Siemens companies for the massive technological transformations that we are anticipating.”
The planned public listing of Siemens Energy will create a strong, focused, global company with operations spanning the entire energy value chain, the statement added.
The new Siemens Energy will have about 91,000 employees worldwide. Its products will include combined cycle turbines, generators, transformers and compressors.
In the area of wind turbines, Siemens Energy will be a world-market leader in renewable energies due to its 67% stake in Siemens Gamesa Renewable Energy, the company said.
As of September 30, 2019, Siemens Energy’s order backlog stood at €77bn and in fiscal 2019, Siemens Energy generated revenue of about €29bn.
Siemens Energy has been provided with liquidity equivalent to about €6.2bn.
After the spin-off, the power firm will be managed separately and independently.