Siemens announced on Thursday its agreement to sell its electrical motors business, Innomotics, to the private US equity firm KPS Capital Partners for 3.5 billion euros ($3.8 billion). Innomotics, a subsidiary known for its motors and related systems utilized across various industries such as chemicals, oil, utilities, and automotive, currently employs approximately 15,000 individuals. The sale, which has received approval from Siemens’ managing and supervisory boards, is anticipated to be finalized in the first half of fiscal year 2025. “I am pleased that we have further optimized our portfolio by selling Innomotics to KPS,” stated Siemens’ chief financial officer, Ralf Thomas.
Established as a separate wholly owned subsidiary of Siemens in 2023, Innomotics was initially planned for a public listing, as announced by Siemens late last year. However, the decision to pursue a sale to KPS represents a shift from this plan.
The sale news coincides with Siemens reporting a 38 percent decline in second-quarter net profit year-on-year, amounting to 2.2 billion euros. Revenue for the January to March period experienced a one percent decrease compared to the previous year, with orders declining by 13 percent. Siemens’ fiscal year runs from October to September.
Recent challenges for Siemens include customer destocking leading to a decrease in orders, particularly evident in key markets like China, where orders plummeted by 25 percent and revenues dropped by 20 percent in the second quarter. The “digital industries” unit, once a significant growth driver, observed a 13 percent reduction in sales. Conversely, the “smart infrastructure” division, focusing on areas such as data centers, reported a slight increase in sales. The “mobility” unit, responsible for manufacturing trains, reported a six-percent revenue increase but a 49 percent decline in orders.
Siemens, headquartered in Munich, has historically been a prominent manufacturer of heavy industrial equipment but has been transitioning its focus towards digital technology and factory automation in recent years.
