Germany's Siemens presents long-awaited overhaul

Tue May 6, 2014 6:14pm EDT
 
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By Noah Barkin

BERLIN (Reuters) - German conglomerate Siemens (SIEGn.DE: Quote) unveiled a long awaited corporate overhaul on Tuesday under which the company will be restructured into nine divisions, its healthcare unit managed separately, and its hearing aids business publicly listed.

The measures are part of a new strategy to be formally unveiled at the firm's historic "Siemensstadt" site in Berlin on Wednesday by Chief Executive Joe Kaeser, who took the reins of the company last summer following a boardroom coup.

The presentation comes at a time when Siemens is considering submitting a formal offer for the energy business of French rival Alstom (ALSO.PA: Quote), which has already received a $16.9 billion bid from U.S. giant General Electric (GE.N: Quote).

Siemens confirmed on Tuesday that it was buying the aero-derivative gas turbine and compressor business of Rolls-Royce (RR.L: Quote) for roughly 950 million euros ($1.32 billion).

Under that deal, Siemens will pay an additional 240 million euros to secure exclusive access to future Rolls-Royce aero-turbine technology and preferred access to supply and engineering services for a 25-year period.

Kaeser, a 34-year veteran of Siemens who previously served as its finance chief, has vowed to restore the sense of pride at a company that has lagged big competitors like GE and Philips (PHG.AS: Quote) in terms of innovation and profitability.

According to Reuters data, Siemens currently trades at a 7.3 percent discount to its major European peers on a 12-month forward EV/EBITDA basis.

Kaeser's predecessor Peter Loescher was ousted last July after a series of profit warnings, costly contract delays and an aggressive drive for growth which left Siemens with a lumbering portfolio of businesses.   Continued...

 
The company logo of Siemens is pictured after an annual news conference in Berlin November 7, 2013. REUTERS/Tobias Schwarz