Siemens buys Flender for €1.2bn to broaden its portfolio
Siemens has bought the gear giant Flender for €1.2bn from its owner, the London-based venture capital organisation, Citigroup Venture Capital Equity Partners (CVC). Provided that the deal is approved by the anti-trust authorities, Flender will become Siemens Automation & Drives` eleventh division.
Siemens says that the aim of the deal is to add gear systems to its drives technology portfolio. "This acquisition is an important step, which ideally rounds off our drive systems portfolio," says A&D president, Helmut Gierse. "With gear technology, we will not only be in a position to serve a rapidly-growing part of the market, but we will also be able to tailor our whole range of products and systems even better to the requirements of our customers in all industries and regions."
The Flender group employs 6,700 people at 80 locations worldwide, and has annual sales of just over €1bn. Its portfolio includes gear-motors and couplings, as well as gearboxes. CVC bought Babcock Borsig`s 95% stake in Flender in 2000, since when Flender has made improvements in efficiency, productivity and cashflow generation, while expanding its global reach.
Flender`s chief executive, Dr Winfried Walzer regards the Siemens takeover as "an exciting step, which will further develop the company`s activities".
Flender was founded in 1899 as a manufacturer of wooden pulleys. About a third of its business currently comes from the windpower industry.
The acquisition will allow Siemens to supply complete drive systems, and to optimise installations over the entire drive chain. It will also help it to tap into the market for integrated systems, which is growing faster than the general automation market. The deal also offers Siemens the possibility of adding greater value as well differentiating its offerings from those of its rivals.
The integration of motors, drives and gear systems will lead to smaller, lighter, longer-lasting and higher-performing drive systems, Siemens predicts.
Flender`s windpower business is another drawcard for Siemens, which wants to expand its activities in this area.
The global market for industrial drive technologies is worth around €25bn, and is growing at an annual rate of about 2.5%.