ROUNDUP2: Siemens Energy considers complete takeover of Gamesa – trading suspended

(New: Confirmation by the company, share price)

MUNICH (dpa-AFX) – The energy technology group Siemens Energy has confirmed considerations about a possible complete takeover of the wind power subsidiary Siemens Gamesa (Siemens Gamesa). The company was thus commenting on speculation that had become public a few hours earlier. And even after a complete takeover, there are already initial ideas as to what should happen to the problem subsidiary. Media speculation and the company’s confirmation caused turbulence on the stock exchange.

Gamesa shares had increased in value by double digits in premarket trading. According to the official comment from Siemens Energy, the plus was still 11.2 percent before trading in the notes was suspended. Siemens Energy shares were up almost four percent in early trading, making them the biggest winners in the medium-weight index.

As the company, which is listed on the MDAX, announced on Wednesday morning shortly after the start of the stock exchange in Munich, the management is considering a purchase offer in cash. The subsidiary Siemens Gamesa could then be taken off the stock exchange. However, the result of these considerations is open. No decision has been made yet. In addition, there is no certainty whether there will be a deal or not, it said.

Siemens Energy already owns a good two-thirds of Gamesa’s shares, and the company, headquartered in Spain, has been valued on the stock exchange at around 9.6 billion euros. Rumors of a possible takeover have been circulating for months. The Bloomberg news agency had reported a few hours earlier, citing people familiar with the matter, about corresponding considerations.

With a complete takeover, Siemens Energy wants to open a new chapter and solve the ongoing problems at the wind power subsidiary on its own. Because in the past few months, Siemens Energy had been affected as a result of the subsidiary’s continued weak development.

According to the Bloomberg report, the shareholders are likely to incur a small premium for the project; the average target price of analysts was recently a little over 18 euros. Since the beginning of the year, the share has lost a third of its value.

Siemens Energy had lowered its forecast last week as a result of the continued weak development at Gamesa. Sales and operating profit are now likely to be at the lower end of the previously stated forecast ranges, it said. The bottom line is that the management around CEO Christian Bruch expected persistently high losses. “The situation at Gamesa has worsened since the last profit warning,” said Bruch. For the fourth consecutive year, Gamesa had spoiled its parent’s quarterly results.

Turbine manufacturers currently have to brace themselves for rising costs for energy, steel and copper. The ongoing supply bottlenecks are wearing down profitability. In the specific case of Siemens Gamesa, price increases and a selective selection of orders should help. In addition, the problems with the new land turbine 5.X are to be tackled, which are apparently even more serious than initially suspected, as CEO Jochen Eickholt, who has only been in office since the beginning of March, recently said./ngu/mne/stk