Berlin (AFP) – German industrial giant Siemens said Thursday it will sell its electric motor business Innomotics to U.S. private equity firm KPS Capital Partners for 3.5 billion euros ($3.8 billion).
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Its subsidiary, Innomotics, whose motors and other systems are used in a variety of industries including chemicals, petroleum, utilities and automotive, has approximately 15,000 employees.
The group said the sale has been approved by its management and audit committees and the transaction is expected to close in the first half of the 2025 financial year.
“We are pleased to have made further progress in optimizing our portfolio by selling Innomotics to KPS,” said Ralph Thomas, Siemens’ chief financial officer.
Innomotics was independently established in 2023 as a wholly owned subsidiary of Siemens.
Siemens announced late last year that it was planning to list Innomotics, but scrapped those plans by selling it to KPS.
News of the sale comes as Siemens, whose products range from trains to factory equipment, announced second-quarter net profit of 2.2 billion euros, down 38% from a year earlier.
From January to March, sales fell 1% year-on-year and orders fell 13%. The company’s fiscal year runs from October to September.
Siemens has been in trouble in recent months as customers “restocked” products after building up excess inventory.
Business in China, a major market, was particularly weak, with orders falling 25% and revenue falling 20% in the second quarter.
Sales at the Digital Industries division, which provides technology for factory automation and had been a key growth driver, fell by 13%.
On the other hand, sales in the “smart infrastructure” division, which handles data centers and other areas, increased slightly.
In the Mobility division, which manufactures trains, sales rose 6%, but orders fell 49%.
The Munich-based group has been producing heavy industrial equipment for many years, but in recent years has been shifting its focus to digital technology and factory automation.
© 2024 AFP
