- Offer at € 18.05 per share,
representing an attractive premium of 27.7 percent to the last unaffected
closing share price of Siemens Gamesa Renewable Energy of € 14.13 on 17 May
2022
- The transaction will
support management’s efforts to resolve the current challenges at Siemens
Gamesa Renewable Energy, and generate value for the companies’ shareholders
- Combined Group is best
positioned to capture the attractive growth potential of wind and support its
customers in the energy transition
- It is Siemens Energy’s
intention to fully integrate Siemens Gamesa Renewable Energy; full integration
would lead to cost synergies of up to approx. € 300 million p.a. within three
years after full integration; in addition, Siemens Energy would expect revenue
synergies of a mid-triple-digit million € amount by the end of the decade
- Value creation through
simplified corporate structure, unified strategy, integrated operations,
increased ability to adapt in a very dynamic environment, and stronger access
to financing for Siemens Gamesa Renewable Energy’s business
- Siemens Energy is and remains
committed to a solid investment grade credit rating
Today, Siemens Energy AG (“Siemens Energy”)
announced a voluntary cash tender offer to acquire all outstanding shares in
Siemens Gamesa Renewable Energy, S.A. (“SGRE”),
i.e., approx. 32.9 percent of SGRE’s share capital, which it does not
already own. SGRE’s minority shareholders will be offered € 18.05 per share in
cash. Following a successful closing of the transaction,
Siemens Energy intends to pursue a delisting of SGRE from the Spanish stock
exchanges, where it currently trades as a member of the IBEX 35 index.
With wind being a key driver of the global energy transition, SGRE’s product and service offering forms an essential part of Siemens Energy’s long-term strategy. However, SGRE’s recent financial performance issues, driven by
operational challenges and industry-related headwinds and reflected in multiple
profit warnings, increased the need for action. The integration will support
management’s efforts to resolve the current challenges at SGRE by helping implement
the necessary measures to stabilize the business and deliver on its full
potential. In particular, SGRE will benefit from Siemens Energy’s closer
involvement into the day-to-day operations and its turnaround expertise,
especially in the fields of manufacturing, supply chain, project and customer
management.
“The full integration of SGRE is an
important milestone for Siemens Energy’s positioning as a driver of the energy
transition from fossil to sustainable energy solutions. This will benefit
customers, employees, shareholders, and ultimately society. It is critical that
the deteriorating situation at SGRE is being stopped as soon as possible, and
the value-creating repositioning starts quickly. The Supervisory Board strongly
supports the Executive Boards plans for the integration of SGRE,” said Joe
Kaeser, Chairman of the Supervisory Board of Siemens Energy AG.
At the same time, the transaction
reinforces Siemens Energy’s strategy as one of the leading integrated energy
technology companies with a strong ESG focus and provides significant value
creation opportunities for the Group and its stakeholders. Together, Siemens
Energy and SGRE are best positioned to unlock the full growth potential in the
industry and support customers in the energy transition. After full
integration, the
combined Group may benefit from expected cost synergies of up to approx. € 300 million
p.a. within three years. In addition, revenue synergies of a mid-triple-digit
million € amount are expected by the end of the decade.
“The integration of SGRE is an important
step on our strategic roadmap to lead the energy transition. As an integrated
group with a more holistic offering, we will be even better positioned to
support our customers on the way to a more sustainable future. This transaction
comes at a time of major changes affecting global energy. Our conviction is
that the current geopolitical developments will not lead to a setback to the
energy transition. Accelerating renewables will play a key role in this
journey. Joining forces with SGRE will benefit both companies and all
stakeholders,” said Christian Bruch, CEO of Siemens Energy.
Transaction
in line with Siemens Energy’s long-term strategy
Siemens Energy strongly believes that the
breadth and depth of its portfolio, which encompasses renewable and
conventional power generation, industrial applications and transmission solutions,
will be essential to lead the energy transition. As such, Siemens Energy has
established a strategy along three pillars: low- or zero-emission power
generation, transport and storage of electricity and reducing the CO2-footprint
and energy consumption in industrial processes. The transaction will enable
Siemens Energy to further strengthen and capitalize on these strategic pillars
as SGRE plays an essential role in the transition to zero-emission power
generation. In addition, it will help solidify the Group’s market leading
position in this area.
Significant
value creation opportunities in the long-term
A successful integration will allow both
Siemens Energy and SGRE to deliver to their full potential. With a successful
delisting of SGRE, the Group will be able in a first step to simplify processes
and move towards a more streamlined corporate structure and leaner governance. The integration aims to improve the company’s
profitability, predictability of financial results and growth. In the case of full
integration, the estimated cost synergies of up to approx. € 300 million p.a.
will mainly result from better supply chain and logistics costs, aligned
project execution, joint and integrated R&D efforts as well as cost
reductions through an optimized administrative setup. Revenue synergies of a mid-triple-digit-million € amount are
expected in the mid to long-term resulting from a joint go-to-market approach
and combined offerings.
Positive impact on all stakeholders;
Spain continues to play an important role
The transaction will further create
significant value for all stakeholders. For customers seeking CO2-reducing solutions and grid technologies, the integrated Group will
provide a one-stop-shop approach built on a stronger offering and unified customer
coverage. The transaction will also allow Siemens Energy to strengthen
supplier-customer relationships across markets with additional growth
opportunities for suppliers through increased volumes. Siemens Energy’s
shareholders will benefit from the Group’s improved strategic position, new
opportunities in the attractive wind market as well as robust and solid cash
management.
Spain will
continue to play an important role in the Group’s
activities. A successful transaction will provide augmented career opportunities
and competitive work conditions for existing and potential future employees.
Key terms of the voluntary cash tender
offer
The offer of € 18.05 per share in cash for
all outstanding shares in SGRE represents a premium of 27.7 percent to the last
unaffected closing share price of Siemens Gamesa Renewable Energy of
€ 14.13 on 17 May 2022. The offer price exceeds the 6-month Volume Weighted
Average Price (“VWAP”) of the SGRE share prior to the date of this
announcement, calculated in accordance with Spanish market practice and Spanish
Takeover Regulations. The audit firm PwC was engaged as an independent valuator
to issue a valuation report in order to comply with Spanish rules on delisting.
The funding of the acquisition is fully
underwritten by Bank of America and J.P. Morgan. Siemens Energy is and remains
committed to a solid investment grade credit rating. Assuming a full acceptance
of the offer, Siemens Energy intends to finance up to € 2.5 billion of the
transaction value with equity or equity like instruments. The remainder of the
transaction would be financed with debt as well as cash on hand. As a first
step, equity may be offered without subscription rights, subject to market
conditions.
In accordance with Spanish Takeover
Regulations, the regulatory announcement is published at the website of Spain's
National Securities Market Commission (“CNMV”) on the following link www.cnmv.es. Following the approval by CNMV, the
prospectus with the details of the transaction will be published and made also
available on: www.siemens-energy.com/sgre.
The transaction is expected to close
during the second half of the year 2022.
Information and forward-looking statements
This
document contains statements related to our future business and financial
performance, and future events or developments involving Siemens Energy that
may constitute forward-looking statements. These statements may be identified
by words such as “expect,” “look forward to,” “anticipate” “intend,” “plan,”
“believe,” “seek,” “estimate,” “will,” “project,” or words of similar meaning.
We may also make forward-looking statements in other reports, prospectuses, in presentations,
in material delivered to shareholders, and in press releases. In addition, our
representatives may from time to time make oral forward-looking statements.
Such statements are based on the current expectations and certain assumptions
of Siemens Energy´s management, of which many are beyond Siemens Energy´s
control. These are subject to a number of risks, uncertainties, and other
factors, including, but not limited to, those described in disclosures, in
particular in the chapter “Report on expected developments and associated
material opportunities and risks” in the Annual Report. Should one or more of
these risks or uncertainties materialize, should acts of force majeure, such as
pandemics, occur, or should underlying expectations including future events
occur at a later date or not at all, or should assumptions prove incorrect,
Siemens Energy´s actual results, performance, or achievements may (negatively
or positively) vary materially from those described explicitly or implicitly in
the relevant forward-looking statement. Siemens Energy neither intends, nor
assumes any obligation, to update or revise these forward-looking statements in
light of developments which differ from those anticipated. This document
includes supplemental financial measures –that are not clearly defined in the
applicable financial reporting framework– and that are or may be alternative
performance measures (non-GAAP-measures). These supplemental financial measures
should not be viewed in isolation or as alternatives to measures of Siemens
Energy´s net assets and financial position or results of operations as
presented in accordance with the applicable financial reporting framework in
its consolidated financial statements. Other companies that report or describe
similarly titled alternative performance measures may calculate them
differently. Due to rounding, numbers presented throughout this and other
documents may not add up precisely to the totals provided and percentages may
not precisely reflect the absolute figures.