How will Siemens retain control after the spinoff?

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Siemens to Maintain Control Through Strategic Minority Stake After Power and Gas Spinoff

Siemens intends to retain control over its spun-off power and gas division by holding a blocking minority stake in the new, independently listed entity. This strategic move will allow the conglomerate to exert influence and maintain oversight while simultaneously removing the detailed financial performance of the power and gas unit from its consolidated reporting. The plan is part of Siemens' broader strategy to streamline its operations and focus on digital and digitally-enhanced businesses.
Retention of Control via Blocking Minority

Siemens will secure a blocking minority shareholding in the newly formed power and gas company once it is listed on the stock market. This specific shareholding percentage, while not detailed, is designed to provide sufficient voting power to block significant decisions made by the new entity's management or other shareholders. This approach enables Siemens to maintain a degree of command over its former division's strategic direction without requiring full ownership.
Exclusion of Detailed Earnings from Reporting

A key consequence of this structure is the ability for Siemens to exclude the detailed financial results of the power and gas unit from its own financial statements. This aligns with the stated desire of chief executive Joe Kaeser to reduce quarterly reporting complexity and focus investor attention on the core remaining businesses. By separating the reporting, Siemens can present a clearer financial picture of its future-focused industrial operations.
Broader Conglomerate Restructuring

The spinoff of the power and gas unit is consistent with a trend among large German industrial conglomerates, such as Thyssenkrupp and Bayer, to divest non-core assets. This division, which includes oil and gas operations, gas turbines, and power transmission services, is slated to be listed on the stock market by September 2020. This move follows pressure from shareholders for Siemens to redefine its strategic path and is part of a larger effort to slim down and become a more focused entity.
Focus on Digital Businesses

The remaining businesses within Siemens will primarily encompass digital and digitally-enhanced products. These include areas like factory automation, intelligent infrastructure, construction services, and energy management. While the future of the rail division remains less clear following the rejection of a proposed merger by the European Commission, Siemens' leadership has expressed a desire to grow in this sector if opportunities arise.

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How will Siemens retain control after the spinoff?

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