Emerson's Network Power

Reports: Siemens Eyes U.S. Acquisition

Siemens ceo Joe Kaeser 2015 source bloomberg
Siemens CEO Joe Kaeser is reportedly looking at his next acquisition target.
  • Why it matters

    Why it matters

    The acquisition of Emerson Electric’s power network business could strengthen Siemens’ position in the United States and enable better competition with arch rival General Electric.

  • Facts

    Facts

    • Emerson Electric said last June it wanted to spin off its network power business.
    • The operations, which make power systems for data centers, could be worth as much as $4 billion, or €3.5 billion, according to Reuters.
    • Siemens CEO Joe Kaeser has been buying and selling assets since taking charge in 2013 and could merge its wind turbine operations with Spanish peer Gamesa.
  • Audio

    Audio

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Siemens Chief Executive Joe Kaeser might again make 2016 a year of blockbuster takeovers and deals.

Munich-based Siemens is in early-stage talks with Emerson Electric to buy the U.S. company’s network power business, news agencies Reuters and Bloomberg reported late Monday, citing unnamed people familiar with the matter.

The business could be worth as much as $4 billion, or €3.5 billion, according to Reuters. Emerson Network Power had sales of $4.4 billion in its fiscal year 2015, which ended on September 30 last year.

Siemens, which has spent around $10 billion on acquisitions since December 2013, declined to comment on the reports when contacted by Handelsblatt Global Edition.

The Emerson deal would be Siemens' biggest since the $7.6-billion acquisition of U.S. oil equipment specialist Dresser Rand last year.

Since Mr. Kaeser became chief executive in August 2013, Siemens has been buying and selling operations in a bid to increase profitability and sales and keep up competition with arch rivals General Electric, Switzerland’s ABB and French company Schneider Electric.

Siemens, which promised in January to grow earnings in its fiscal year 2016, has also been in talks with Spanish wind-turbine maker Gamesa about a possible merger or combining operations with Siemens’ wind business, which could create the world’s largest manufacturer of wind turbines.

U.S. businesses have been a key target in the past year. In January, Siemens bought U.S. software specialist CD-Adapco for almost $1 billion. A deal with Emerson would be Siemens’ biggest since the $7.6-billion acquisition of U.S. oil equipment specialist Dresser Rand last year – an acquisition for which Mr. Kaeser has come in for criticism over the high price he paid.

 

Siemens Acquisitions-01

 

St. Louis-based Emerson said last June it wanted to spin off the network power business to focus on engineering operations, such as industrial automation and climate technologies. The U.S. company is also in talks with private equity firms, including Platinum Equity, to buy the business, while other companies have also expressed interest, Reuters reported.

There was no certainty of a deal and Emerson might still pursue a spin-off instead of a sale, Bloomberg reported, citing people familiar with the matter.

Siemens shares were down 2.3 percent at €89.31 on Tuesday morning in Frankfurt, in line with a 2.5-percent fall of the German blue-chip DAX index.

 

Gilbert Kreijger is an editor with Handelsblatt Global Edition in Berlin, covering companies and markets. To contact the author: kreijger@handelsblatt.com

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