Siemens weighs carving out Gas and Power unit

Siemens CEO Joe Kaeser attends a signing ceremony ahead of a news conference with German Chancellor Angela Merkel and Iraqi Prime Minister Adil Abdul-Mahdi at the Chancellery in Berlin, Germany. (File/Reuters)
Updated 04 May 2019
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Siemens weighs carving out Gas and Power unit

MUNICH: German industrial conglomerate Siemens is weighing options for its Gas and Power unit, carving out all or part of the business to prepare it for a potential stock market listing or a merger with a peer, two people close to the matter said.
The business caters to the oil and gas industry as well as to power generators and distributors.
The sources said Siemens’ supervisory board may decide on a potential carve-out at a meeting on Tuesday and could present the plans at the company’s capital markets day on Wednesday.
Siemens declined to comment on the future strategy for the Gas and Power unit, whose gas turbines business has seen orders slump as utilities shift toward renewable energy sources.
“The situation on the global market for fossil power plant technology remains unchanged. Siemens began tackling these challenges back in early 2015,” a company spokesman said.

 

Chief Executive Joe Kaeser has embarked on a strategy to simplify Siemens’ operations by separating the conglomerate into what he has termed “a fleet of ships” which thrive under their own steam.
The move is designed to enable the businesses to raise their own funds for acquisitions and investments as well as crystallising their standalone market value, removing some of the “conglomerate discount” that weighs on Siemens’ valuation.
As part of this push, Siemens listed its health care unit Healthineers last year.
Siemens also has a separately listed renewable power business, Siemens Gamesa.
Kaeser tried to combine its train segment Siemens Mobility with listed peer Alstom, but scrapped the deal earlier this year as antitrust concerns mounted. Analysts expect that Siemens will eventually opt for a stock market listing for the Mobility unit.
Siemens has told investors that its capital markets day would focus on its Gas and Power, Smart Infrastructure and Digital Industries businesses, none of which have so far have been set up as independent companies.
Gas and Power, headquartered in Houston, Texas, makes gear for oil and gas extraction and production, as well as gas and steam turbines and technology for power grids, including high-voltage transmission systems.
The unit was set up weeks ago as part of a reshuffle Siemens’ business units.

FASTFACTS

Siemens’ gas and power unit is headquartered in Houston.


China opens up finance sector to more foreign investment

Updated 20 July 2019
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China opens up finance sector to more foreign investment

  • China will remove shareholding limits on foreign ownership of securities, insurance and fund management firms in 2020
  • Beijing has long promised to further open up its economy to foreign business participation and investment

BEIJING: China lifted some restrictions on foreign investment in the financial sector Saturday, as the world’s second largest economy fights slowing growth at home and a damaging trade war with the US.
China will remove shareholding limits on foreign ownership of securities, insurance and fund management firms in 2020, a year earlier than originally planned, the Financial Stability and Development Committee said in a statement posted by the central bank Saturday.
Foreign investors will also be encouraged to set up wealth management firms, currency brokerages and pension management companies, the statement said.
Beijing has long promised to further open up its economy to foreign business participation and investment but has generally dragged its feet in implementing the moves — a major point of contention with Washington and Brussels.
Saturday’s announcement followed a Friday meeting chaired by economic czar Liu He where policymakers focused on tackling financial risk and financial contagion and pledged new steps to support growth, according to a state council statement.
Additional measures include scrapping entry barriers for foreign insurance companies like a requirement of 30 years of business operations and canceling a 25 percent equity cap on foreign ownership of insurance asset management firms.
Foreign owned credit rating agencies will also be allowed to evaluate a greater number of bond and debt types, the statement said.
US President Donald Trump has launched a damaging tariff war in an attempt to force Beijing to further open up its economy and limit what he calls its unfair trade practices.
The US and China have hit each other with punitive tariffs covering more than $360 billion in two-way trade.
Trump and Xi Jinping agreed to revive fractious trade negotiations when they met on the sidelines of the G20 summit in Japan on June 29 and top US and Chinese negotiators have held phone talks this month.