Putting UP

premium

In $10 Billion Day of Deals, Siemens CEO Kaeser Answers Critics

Joe Kaeser_DPA
Joe Kaeser: onwards and upwards.
  • Why it matters

    Why it matters

    Siemens needs to reenergize its business and increase profitability, or risk trailing further behind its rivals.

  • Facts

    Facts

    • Siemens to buy U.S. energy engineering firm Dresser-Rand, which has fracking technology and is based in Houston, Texas.
    • The German firm, lead by Joe Kaeser, is expanding its energy operations, especially in the United States.
    • Siemens failed to buy French rival Alstom earlier this year, losing out to U.S. peer General Electric.
  • Audio

    Audio

  • Pdf

The Siemens chief executive, Joe Kaeser, made his boldest moves so far to reshape Germany’s struggling engineering conglomerate, announcing the $6.4 billion purchase of U.S. energy equipment maker Dresser-Rand, and the sale of its 50 percent stake in Bosch and Siemens Household Appliances.

The deals revealed on Monday will not only transform Siemens. They marked a personal victory for Mr. Kaeser, who had come under criticism in Germany for promising but not delivering on the turnaround at the Munich engineering giant, one of Germany’s largest private employers with 362,000 workers.

In buying Dresser-Rand, which is based in Houston, Mr. Kaeser prevailed against his former boss and colleague at Siemens, Peter Löscher, who is now non-executive chairman at Sulzer, a Swiss company that had also been bidding on Dresser-Rand.

Mr. Kaeser succeeded Mr. Löscher in August 2013 at Siemens, after serving as chief financial officer. Mr. Löscher quit after he had failed to turn around Siemens, which has lagged rivals such as General Electric in the United States and ABB, a Swiss-Swedish comglomerate, in profitability and growth.

The deal announced on Monday is another restructuring move by Kaeser, who had been Siemens’ finance chief since 2006 and faces dissastisfied shareholders. Investors last week told Handelsblatt Mr. Kaeser should show progress in reforming the German industrial group.

On Monday, he did.

 

Want to keep reading?

Subscribe now or log in to read our coverage of Europe’s leading economy.