Exclusive: Siemens to keep most underperforming divisions - source

Fri May 1, 2015 7:36am EDT
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By Georgina Prodhan and Jens Hack

FRANKFURT/MUNICH (Reuters) - German industrial firm Siemens (SIEGn.DE: Quote) plans to keep most of its 13 underperforming businesses for now and will try to sell a handful of "marginal" operations, a source with direct knowledge of the matter told Reuters.

Siemens said late last year it would decide by May what to do with the businesses it has identified as problems and that account for 18 percent of sales, or some 13 billion euros ($15 billion), and no profit.

The source said Siemens would try to sell three to five small divisions, such as industrial waste water treatment, which require expertise that does not fit with Siemens' electrical competence, or operations that will cost too much to fix.

"These are marginal things," the person said. "The core businesses will be restructured."

Siemens, which has not disclosed what the 13 businesses are, declined to comment.

Once a sprawling engineering group with businesses from trains to turbines to hospital IT to hearing aids, Siemens is being streamlined by new Chief Executive Joe Kaeser.

He wants to focus on Siemens' strengths in electrification, automation and digitalization and close a profitability gap with arch-rival General Electric (GE.N: Quote).

A second source familiar with the matter said Kaeser wanted to prove Siemens could turn around unprofitable businesses by itself.   Continued...

The Siemens logo is seen during the IFA Electronics show in Berlin September 4, 2014.  REUTERS/Hannibal Hanschke