Carlyle Group Inc. agreed to acquire Siemens AG’s mechanical-drive unit Flender for more than 2 billion euros ($2.4 billion) in one of the last acts to unwind the German conglomerate under its longtime Chief Executive Officer Joe Kaeser.
Carlyle is buying Flender to make it more independent and accelerate its growth, Siemens said, confirming a report from Bloomberg. The firm outbid suitors including Canada’s Brookfield Asset Management Inc. in the end, people familiar with the matter said earlier this week. The transaction is expected to close in the first half of 2021, Siemens said.
The disposal of Bocholt, Germany-based Flender marks one of the final steps by Kaeser to turn the industrial-manufacturing giant into a more manageable entity for his successor, Roland Busch. Last month, the company listed Siemens Energy AG, whose technology is behind roughly one-sixth of the world’s electricity. Health-equipment company Siemens Healthineers went publicin 2018.
Siemens had been exploring a sale as well as a spinoff of the Flender business, which it bought from Citigroup Inc. in 2005. The unit makes gears and transmissions used in everything from cement production and shipbuilding to beer making and offshore oil extraction. The company’s flagship products are 150-ton transmissions that connect wind-turbine blades to generators.
Flender employs about 8,600 people and generated pro-forma revenue of about 2.2 billion euros in fiscal 2020. Carlyle agreed to make “long-term and reliable commitments” for the business and its employees, Siemens said, without specifying.
The European industrials sector has been a bright spot for dealmakers in an otherwise drab year for mergers and acquisitions. There have been about $127 billion worth of European transactions involving industrials companies so far in 2020, according to data compiled by Bloomberg. That’s 5% up on the same period in 2019.