Siemens sells geared motor biz to parent for ₹2,200 cr

The transaction, effective 1 October, is subject to fulfilment of all conditions agreed between the parties, including necessary approvals by shareholders, and statutory and regulatory authorities, it added.

The company has decided to distribute the proceeds as special dividend among shareholders after applicable taxes.

“Here basically the rationale is Germany globally decided to carve out low voltage motors and geared motors business into a legally separate company. This is their decision to form a new company, Innomotics GmbH (Germany),” said Sunil Mathur, managing director and chief executive, Siemens India.

The company may be moving out of a ‘sunrise sector’ but the sector is not innovative, he said. “If the parent decides that they would like to move out of the business either through an IPO or find a strategic buyer for it…The Intellectual Property Rights will move with that since it is with the parent.”

On other focus areas, Mathur said it is heavily investing and focusing on the mobility business.

“We have just won a large order of ₹26,000 crore for locomotives. We have two electrification projects in various metro and Vande Bharat projects. We have performed the entire safety, security, fire safety and electrification of the new Parliament building. So, all of these are the focus areas that we are moving into as also our digital portfolio, where we have got solutions.”

Mathur said the firm carried out an independent valuation of its businesses, which threw up a valuation figure of ₹2,070 crore to ₹2,165 crore.

“The board decided to increase it to ₹2,200 crore to safeguard the interests of minority shareholders,” he said.

The valuation was reviewed by an independent banker, who has given his recommendations and the board made its valuation calculations based on that recommendation.

In a separate development, Siemens signed an agreement on Friday to but the EV arm of Mumbai-headquartered Mass-Tech Controls Pvt Ltd, which will help it meet the increasing demand for electric vehicle charging infrastructure in India.

Mass-Tech is engaged in design, engineering and manufacturing of a wide range of AC chargers, and 30 to 300kW capacity DC chargers for various end applications for EVs.

The purchase consideration is ₹38 crore on a cash free and debt free basis, and will be subject to mutually agreed upon adjustments between the two parties.

“This acquisition gives us the ability to provide charging stations that are approved and meet immediate regulatory requirements and really scale this up in the country for electric buses and so on. So, it’s a business that we can take and scale up first in India and possibly, thereafter, as part of a global supply chain,” Mathur signed off.