22 MAY 2022 - 22:12CEST
Siemens Energy brought forward to Saturday night the presentation of the delisting tender offer for Siemens Gamesa
(SG), due to the 25% rise in the share price of its wind power subsidiary in the previous three days. It will pay 18.05 euros per share in cash to acquire the 32.93% it does not control (the remaining 67% is in its hands). The disbursement will reach 4,048 million. The price implies valuing its wind power subsidiary at 12,294 million euros. Gamesa informed the CNMV on Sunday night that it has taken "cognizance of the offer" and has set up a committee to monitor it. This is composed of the board member Gloria Hernández, and the board members Francisco Belil, Harald von Heynitz and Rudolf Krämmer.
The market had taken the transaction for granted, which had caused the wind power company to be among the Ibex 35 stocks with the highest increases in the previous trading days from May 18 to 20. With the share price up and hovering around 17 euros per share, the German corporation has opted to bring forward the takeover bid by a few days
, expected for Tuesday, when it will hold a meeting with investors. 18.05 euros per share represents a premium of 27.7% over the 14.13 euros recorded at the close of trading on May 17, the day before the aforementioned stock market rises, which Siemens Energy considered "affected" by the information on the takeover bid. The premium over the last trading day, last Friday, when it traded at 16.745 euros per share, is 7.79%.
The offer exceeds the average share price of the last half year, as required by Spanish regulations. PwC has acted as auditor and the financing of the takeover bid is "fully underwritten" with Bank of America and JP Morgan. Siemens Energy will contribute 2,500 million with capital
"or similar instruments", in relation to the issuance of new shares. The rest will be covered by debt and "available cash".
The Munich group itself had to confirm on May 18 that it was studying the operation, after the National Securities Market Commission (CNMV) suspended trading. At that day's reopening, SG rose by 12.60% and climbed to 15.91 euros. In view of the rise, Siemens Energy has not let any more time pass to prevent the takeover bid from becoming more expensive.
The wind turbine producer will be "completely" integrated
into the structure of Siemens Energy, where Jochen Eickholt, CEO of Siemens Gamesa since March 1, and a specialist in turning around companies that are going through a bad period, has spent his career. He has said that never in his professional career has he known a company with as many possibilities for growth as Siemens Gamesa, due to its promotion of renewable energies around the world to fight climate change.
The German multinational expects to complete the integration of SG in three years and consolidate savings of 300 million euros
. By the end of this decade, the synergies of this union will reach "hundreds of millions of euros". Siemens Energy says that the full absorption of its wind power subsidiary "will create value through a simplified corporate structure", based on a single strategy and better access to SG's financing.
SG's losses of 2,208 million in the last two and a half years have "increased the need for action," Munich said, to "stabilize the business and bring out its full potential." Siemens Energy "will be involved in the daily operations" of the company based in Zamudio (Bizkaia).
According to this speech, the top shareholder's experience in "transformations, especially in areas such as production, supply chain and project and customer management," will benefit its wind power investee.
"It is essential that the deterioration" of Siemens Gamesa "is stopped as soon as possible," said Joe Kaeser, chairman of Siemens Energy's supervisory board. For his part, Christian Bruch, CEO of the Munich-based group, said that "current geopolitical events," such as Russia's invasion of Ukraine, "must not represent a step backwards in the energy transition
. Accelerating the growth of renewables will play a key role on this path," he concluded.
The union of the Munich-based corporation and the Zamudio-based company will enable a "one-stop shop" approach to customers in the wind power market, according to Siemens Energy's approach, which stressed that Spain "will continue to play an important role in the group's activities."
All the alarm bells had gone off at Siemens Energy due to the losses accumulated by its wind power subsidiary. In Munich, they do not understand this negative drift in a sector with a promising future, although other leading turbine manufacturers, such as Vestas, also have profitability problems.
In last Saturday night's statement, the German group insisted that its integration with SG "is an important milestone
for the positioning" of Siemens Energy as a "driver of the energy transition", to move from an economy based on fossil fuel generation to one based on a renewable mix.
In line with this message, Siemens Energy conveys that all of this "will benefit customers, employees, shareholders and ultimately society." Kaeser and his team, apart from halting the aforementioned decline of the wind turbine producer as soon as possible, are hoping for a "repositioning" that will help "create value quickly". It seems that since the merger of Siemens and Gamesa in 2017 there is no room for further delays when it comes to achieving a profitable business.
The team that Siemens Energy and its investee will now form will be "better positioned" to "unlock the full growth potential of the industry" wind. It will also be able to "support customers" in the energy transition. Among them Iberdrola, which already sold in February 2020, before the outbreak of the pandemic, its 8% stake in SG for 1 billion.
The electricity company chaired by Ignacio Galán obtained capital gains of 500 million from the divestment, which put an end to its disagreements with Siemens, which it accused of mismanagement. These differences were reflected in different lawsuits.
When peace came between Siemens Gamesa and Iberdrola, the Bilbao-based group resumed its commercial relationship with the Zamudio-based company, which continues to be one of the main customers for its wind turbines. The 20 euros per share that SG paid Iberdrola is above the price of the delisting tender offer, although at that time, in early 2020, it had not yet accumulated the aforementioned losses of more than 2.2 billion.
Outside these conflicts and in the field of sustainability, Siemens Energy is working to achieve zero-emission generation, transform mobility so that it is no longer one of the most polluting agents and achieve advances in energy storage, the area that will be key to consolidating the transition of the economy to a "greener" model
In the area of research, Siemens Energy will share projects with its wind power subsidiary. All within a culture of cost reduction that will extend through the supply chain, logistics and "an optimized administrative structure".
Siemens Gamesa has one month to submit the explanatory prospectus of the takeover bid to the CNMV. The deadline is June 22. In Saturday's announcement, the group estimates that half of that period
will suffice. For the automatic delisting, the takeover bid would need to be backed by 90%. If this is not achieved and a minimum support of 75% is reached, Siemens Energy will resort to delisting under the delisting offer exception procedure.
To do so, it will have to convene an extraordinary meeting of SG shareholders. The offer is not subject to notification to the National Markets and Competition Commission (CNMC) or the European Commission, because it does not constitute an economic concentration, according to Siemens Energy.