Siemens Energy plans to spin off its Transformation of Industry (ToI) unit, refocusing the energy group on faster-growing power generation and transmission segments.
The Munich-based company will deconsolidate ToI while retaining a "significant minority stake," according to a statement issued Tuesday. External investors may be brought in, and capital market transactions remain an option. Siemens Energy aims to enhance ToI’s operational flexibility and accelerate growth through the separation, which follows sustained speculation about a potential divestment.
ToI serves industrial customers with energy infrastructure, compressors for the oil sector, and hydrogen electrolyzers, employing approximately 17,000 people. The unit generated about €5.7 billion in revenue in the last fiscal year, though its growth has lagged behind Siemens Energy’s core energy businesses. In the current structure, ToI competes for investments with higher-growth segments like power generation and transmission, where returns are realized more quickly.
Siemens Energy CEO Christian Bruch stated that the separation would unlock ToI’s potential by removing structural constraints. "If we do not change our structure, we limit the possibilities for Transformation of Industry," Bruch said. "Our current investment focus is on power generation and transmission, where investments yield higher returns in the short term."
Analysts broadly welcomed the move. JPMorgan’s Phil Buller noted that while ToI’s growth and margins are attractive, they do not align with Siemens Energy’s broader investment strategy. Jefferies’ Lucas Ferhani highlighted the opportunity to concentrate on more profitable energy segments, calling the timing favorable. RBC’s Colin Moody estimated ToI’s standalone value could exceed €10 billion, particularly given its declining contribution to Siemens Energy’s operating profit through 2030.
Siemens Energy’s shares fell 0.4% in early trading Wednesday, underperforming a largely flat DAX index.
