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7 December, 2022

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Siemens plans €3bn spin-off of large motors and drives

17 November, 2022

Siemens is planning to combine several businesses in its motors and drives portfolio to create an integrated motors and large drives supplier with joint revenues of around €3bn and around 14,000 employees. The business will target a global electrification and power conversion market that Siemens estimates is worth more than €20bn.

The plans were revealed by Siemens president and CEO, Dr Roland Busch, at the company’s annual financial results presentation. He said that while working on plans to spin off Siemens’ LDA (large drives applications) business, announced a year ago, the company had realised that LDA and another subsidiary – the metals processing specialist, Sykatec – had “many commonalities” in value chains and manufacturing technologies with parts of Siemens Digital Industry’s motion control business. In particular, it discovered synergies with Siemens low-voltage and geared motors operations, and with its specialist precision motor spindles operation, Weiss Spindeltechnologie.

Siemens has therefore decided to combine these businesses during the 2023 financial year to form a new company with its own legal setup. Busch predicted that new company “will be highly competitive with an end-to-end portfolio extending from low-voltage and high-voltage motors to geared motors, medium-voltage converters and motor spindles, rounded off by an innovative portfolio for solutions and digitalisation as well as a broad range of service offerings.

“We’re creating a powerful global player,” Busch stated. “We’re convinced that this integrated motors and large drives provider – with high value creation – will be significantly stronger and more resilient than each business would be if it operated independently.”

The aim is to make the combined business completely independent of Siemens “to ensure that it can reach its full value and margin potential and optimally prepare for future success”.

Busch: creating a powerful global player

Busch emphasised that Siemens’ motion control business along with drive technology and machine tool systems is “a strategically important and a core area” in which the company plans to invest further in the future. The spin-off plans do not include Siemens industrial motors or servomotors operations.

Siemens has not said whether it plans eventually to sell off or to float the new company, which will be competing with global players such as ABB, Japan’s Nidec, Brazil’s WEG and China’s Wolong.

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