The Board of Directors of Siemens Ltd has approved the sale and transfer of its mechanical drives business (MD) for a consideration of Rs.440 crore.
The sale and transfer will be made to Flender Drives Pvt Ltd, subject to adjustment for the change in net current assets and capital expenditure, subsequent to June 30, 2020 up to the date of actual transfer of the MD business.
Sale and transfer to Flender Drives Private Limited, a subsidiary of Flender GmbH, which in turn is a subsidiary of Siemens AG.
The consideration has been arrived at on the basis of an independent valuation, recommended by the Committee of Directors and the Audit committee.
The sale and transfer of MD business is as going concern and on a slump sale basis, with effect from January 1, 2021. The same is subject to receipt of requisite statutory and regulatory approvals, as applicable.
Transaction as going concern and on a slump sale basis, with effect from January 1, 2021, subject to receipt of requisite statutory approvals, if required.
The mechanical drives business within Siemens Ltd achieved revenue of Rs. 683.8 crore for FY19 and had an operating loss of Rs.55.3 crore.
Siemens AG intends to publicly list the mechanical drives business via a spin-off.
Sunil Mathur, Managing Director and Chief Executive Officer, Siemens Ltd, said, “Potential growth in this business will require substantial capex and moreover, there are no synergies with the existing businesses of Siemens Limited. Keeping the interests of the shareholders in mind, the Board of Siemens Ltd has approved the sale of this business to Siemens AG which has also announced their intention to publicly list this business via a spin-off.”
Featured photograph (source: www.flender.com) shows a mechanical drive by Siemens. It may be recalled that in late 2017, Siemens AG had decided that its mechanical drives business will be marketed and sold under the brand name “Flender”, globally.
