By Christoph Steitz and Tom Käckenhoff
FRANKFURT/DUESSELDORF (Reuters) -Siemens Energy will sell 90% of its wind turbine business in India and Sri Lanka to an investor group led by the climate investment arm of buyout group TPG, in the latest move aimed at fixing its struggling renewables division.
Siemens Gamesa, Siemens Energy’s loss-making wind turbine division, holds a 30% market share in India but had said it was considering strategic options for the business, citing cut-throat competition.
“It’s a very fragmented and competitive landscape,” Vinod Philip, Siemens Energy’s board member in charge of Siemens Gamesa, told Reuters. “This deal allows us as Siemens Gamesa to tackle the other markets in a more focused manner.”
Philip said the new company could also become a cost-effective Indian supplier to Siemens Gamesa, helping to diversify its global supply chain.
No financial details of the transaction were disclosed.
Shares in Siemens Energy rose to the top of Frankfurt’s blue-chip index following the news, trading 3.9 higher at 1126 GMT.
As part of the deal, Siemens Energy will transfer around 1,000 employees and two manufacturing plants in India to the new entity, it said.
Around 1,200 of its local staff will not be part of the deal and will remain with Siemens Energy, the company said.
Siemens Gamesa has an installation base of nearly 10 gigawatts in India and provides service to more than 7 GW worth of turbines under long-term agreements, it said, adding the market was expected to add 57 GW of capacity by 2032.
Philip said the focus remained on fixing Siemens Gamesa’s onshore business, which has suffered from a quality crisis around its newer generation 4.X and 5.X turbine models.
An updated version of the 4.X turbine has been brought back into the market and Philip said there were “good conversations” with customers in Europe about it.
(Reporting by Christoph Steitz and Tom Kaeckenhoff. Editing by Thomas Seythal and Mark Potter)
