Fixing all the operational issues at struggling wind turbine maker Siemens Gamesa will take several years, the chief executive of main shareholder Siemens Energy told journalists on Monday.
The comments by Christian Bruch came after Siemens Energy presented a 4.05 billion euro ($4.29 billion) takeover bid for the 33% it does not yet own in Siemens Gamesa.
“It’s nothing which will go fast,” Siemens Energy Chief Executive Christian Bruch told journalists on Monday, less than two days after unveiling the offer. He added this meant “multiple years of really turning” Siemens Gamesa around.
Siemens Energy has faced pressure from shareholders to raise its stake in Siemens Gamesa from the 67% it inherited after a spin off from Siemens. Siemens Gamesa said it would review the offer.
Spanish-listed Siemens Gamesa shares rose 6.4% to about 17.825 euros at 0905 GMT, just below the 18.05 euro per share offer price. Siemens Energy shares rose 0.3% in Frankfurt.
Siemens Gamesa, whose shares had fallen 20% since the start of the year until the offer was made, had issued three profit warnings in less than a year, dogged by product delays and operational problems.
Most European turbine makers have also racked up losses in a fiercely competitive market as metals and logistics prices surged due to COVID-19, import duties and Russia’s invasion of Ukraine.
“There are not yet clear signs of a near-term recovery in the current setup,” Bruch said, adding that Siemens Gamesa’s financial performance was “really creating the need for action”.
MORE CONTROL
Bruch said owning all of Siemens Gamesa would remove an arms-length relationship and give Siemens Energy more control over the asset as well as lead to cost savings and procurement efficiencies.
Asked about the onshore turbine business which has caused particular headaches, Bruch told analysts on a conference call: “There is no reason why you cannot be successful in onshore business if you fix your operational issues.”
There are no plans to sell the unit, he said.
While Siemens Energy will be able to delist Siemens Gamesa once it owns 75%, Bruch said a full integration of the division, which was created from the merger of Siemens AG’s wind business and Spain’s Gamesa, was the clear goal.
Under a tentative timeline, the bid, which Credit Suisse analysts said was “disappointing”, would launch in mid-September before an extraordinary general meeting rubber-stamps it in November, Siemens Energy said.
When asked why the offer was below the 20 euros Siemens paid for Iberdrola’s stake in Siemens Gamesa in 2020, Bruch said that since then the situation at the division had deteriorated and that the offer was attractive.
Bruch said Spain, where Gamesa traces its roots to 1976, would “play a central role in the group activities” going forward.
($1 = 0.9437 euros)
(Reporting by Isla Binnie and Christoph Steitz; Editing by Christian Schmollinger, Edmund Blair and Emelia Sithole-Matarise)
