Siemens Energy Spin-Off
"The listing of Siemens Energy means that we’ve successfully reached a key milestone in Siemens’ structural realignment. With three powerful, focused and independent companies, we have an outstanding setup for the future. The separately listed companies will be in a significantly better position to tap the individual businesses’ value-creating potential than would be possible in a conglomerate. This is another way in which we’re creating prospects for sustainable, long-term expansion of each of the businesses." (Joe Kaeser, President and CEO Siemens AG)
The Siemens AG CMD for the Siemens Energy spin-off was held on Sep 01, 2020.
Documents & Presentations CMD Siemens Energy:
Sep, 28, 2020
Jul, 09, 2020
Jul, 03, 2020
May, 26, 2020
Mar, 19, 2020
Feb, 04, 2020
Bank of America, BNP Paribas, Commerzbank, Credit Suisse, Deutsche Bank, Goldman Sachs and J.P. Morgan will act as lead financial advisors and listing agents. In addition, Berenberg, HSBC and Jefferies will act as co-advisors.
We are convinced that we found strong partners covering a comprehensive investor universe in terms of both, regional distribution and all investor classes.
The managing board of Siemens AG resolved with the approval of the supervisory board to legally separate the worldwide Gas and Power operations of the Siemens Group and the approximately 67% stake held by the Siemens Group in the listed Siemens Gamesa Renewable Energy, S.A. under a German stock corporation and to place it on the stock exchange by way of a Spin-off in accordance with the German Transformation Act. With the Spin-off a participation in Siemens Gas and Power GmbH & Co. KG, to be renamed Siemens Energy Global GmbH & Co. KG, by Siemens AG is transferred to Siemens Energy AG. As consideration for the Spin-off, the Siemens shareholders will be allocated shares in Siemens Energy AG proportionately to their participation in Siemens AG. Upon the Spin-off taking effect, Siemens Energy AG will hold all shares in Siemens Gas and Power GmbH & Co. KG and the shareholders of Siemens AG will hold 55% of the shares in Siemens Energy AG. Immediately after the Spin-off took effect, the shares in Siemens Energy AG were admitted to the Frankfurt Stock Exchange.
The managing board of Siemens AG has thoroughly reviewed and carefully considered each of the options. In the view of the managing board of Siemens AG, compared to alternative transactions, the Spin-off is in the best interest of Siemens AG and its shareholders. The main difference to an IPO (Initial Public Offering) is that in the case of a Spin-off the placement of shares to interested investors is not carried out by a public offering. In the opinion of Siemens AG's managing board, an argument against an IPO of Siemens Energy AG by way of a public offer of the Siemens Energy AG shares, is that, among others, from today's perspective, an IPO does not provide the necessary transaction certainty given the current and anticipated capital market environment over the short term. It would not be possible to predict with certainty whether a public offer of the shares would be possible in the context of an IPO at all or in the amount required for the intended purposes, and, in particular, whether there would be sufficient demand for the issued shares at an acceptable price. Therefore, in case of an IPO, there is the risk that this cannot be implemented during the desired time period on attractive terms. In contrast, in case of a Spin-off, shares are directly transferred to existing Siemens shareholders without individual decisions to buy shares. The latter offers a reliable basis for planning and enables shareholders of Siemens AG to directly participate in the success of the new company. A detailed explanation of the reasons for the Spin-off decision is contained in Chapter III. 3 of the Spin-off report.
The allocation ratio was mainly determined by the future capital stock of Siemens Energy AG, its number of shares and by the fact that the Spin-off relates to a 55% participation. In the opinion of the legal entities involved, the amount of the future capital stock is in a reasonable proportion to the equity and the expected market capitalization of Siemens Energy AG and reasonably reflects the relative sizes of the transferring entity and the receiving entity. When determining the capital stock and the number of shares, it was considered that from today's point of view the future stock price of Siemens Energy AG should lie within an attractive range for private and institutional investors. An explanation and justification of the chosen allocation ratio is contained in Chapter VII. of the Spin-off Report.
Due to the above stated share allocation ratio of 2 : 1, there will be fractional shares (fractional rights) if, on the Allocation Effective Date, the holdings of Siemens shares on securities accounts cannot be evenly divided by 2. Since shareholder rights can generally not be asserted on the basis of fractional rights, Deutsche Bank AG, as the central settlement agent, together with the custodian banks will use its best efforts to achieve compensation between the holders of the fractional rights so that these holders are able to sell fractional rights or acquire corresponding fractional rights in order to top up to full rights. Any acquisition of further fractional rights to top up to full rights (referred to as the settlement of fractions (Spitzenregulierung)) requires a corresponding purchase or sales order. It is to be expected that banks, especially in other countries, will not cooperate in any settlement of fractions or will not accept corresponding orders in particular cases.
To the extent that orders for acquiring further fractional rights in order to top up to full rights are not issued, or any acquisition of further fractional rights to top up to full rights is not possible on the basis of the issued orders, at a point in time still to be determined, Deutsche Bank AG, which has been appointed by Siemens AG as the trustee, will combine the fractional rights to Siemens Energy Shares that have been allocated to Siemens Shares and have not yet been combined to full rights (shares) of Siemens Energy AG and will sell them via the stock exchange. The sales proceeds will then be credited to the relevant holders of fractional rights pro rata according to their respective fractional rights. The settlement of fractional rights is effected free of commissions and fees for the entitled persons who hold their Siemens Shares in securities accounts in Germany. Commissions and fees might be incurred by Siemens Shareholders who hold their Siemens Shares in securities accounts in other countries based on the existing agreements with the relevant custodian bank.
The determination of who is a Siemens shareholder for purposes of the allocation took place on the evening of the Allocation Effective Date (the date on which the Spin-off takes effect as a result of the later of the registrations with the register of companies of Siemens AG), on the basis of the respective holdings of Siemens shares on securities accounts on the evening of the Allocation Effective Date, taking into account any stock exchange transactions still outstanding. Allocation Effective Date was September 25, 2020. Details regarding the processing of the allocation were notified separately to the shareholders of Siemens AG without undue delay after the registration of the Spin-off with the registers of companies of Siemens Energy AG and Siemens AG (“Share Allocation Notification”). The Share Allocation Notification was published by Siemens AG in Germany in the Federal Gazette (Bundesanzeiger) on September 28, 2020.
There was no need for action by Siemens shareholders. Siemens Energy shares were normally credited to the securities account of the relevant Siemens shareholder even prior to the start of trading on the first stock exchange trading day following the Allocation Effective Date provided that these are not based on fractional shares for the account of the shareholders.
Siemens AG has commissioned Deutsche Bank AG, Frankfurt am Main, with the processing of the share allocation. Details regarding the processing of the allocation were notified separately to the shareholders of Siemens AG without undue delay after the registration of the Spin-off with the registers of companies of Siemens Energy AG and Siemens AG ("Share Allocation Notification"). The Share Allocation Notification was published by Siemens AG in Germany in the Federal Gazette (Bundesanzeiger) on September 28, 2020.
From the first day of trading, the stock price of the Siemens Energy share was determined in regular stock exchange trading and depended on supply of and demand for Siemens Energy shares. In XETRA trading on the Frankfurt Stock Exchange, the first price of a trading day was typically determined in an opening auction.
The effects of the Spin-off on the market price of shares of Siemens AG are as follows: The stock price of the Siemens share will be quoted "ex Spin-off" as of the first trading day after the Spin-off becomes effective. Similar to dividend dates, the Siemens share will then be traded without the entitlement to receive the Siemens Energy shares granted in connection with the Spin-off.
Immediately after the Spin-off takes effect, all shares in Siemens Energy AG were admitted to trading on the Regulated Market of the Frankfurt Stock Exchange and also in the sub-segment of the Regulated Market of the Frankfurt Stock Exchange with additional post-admission obligations (Prime Standard).
To the extent that a shareholder is tax resident in Germany, the Siemens shares are held as private assets and the shareholder held at no time during the last five years at least 1% of Siemens AG (Section 17 Income Tax Act (Einkommensteuergesetz)), the Spin-off – with the exception of the sale of fractional rights – should generally be tax neutral. I.e. no taxable capital gains would be realized, if, in particular, the right of the Federal Republic of Germany to tax a gain from the disposal of Siemens Energy shares is not excluded or restricted. As a consequence, no tax on capital gains would have to be withheld and paid. Please understand that we cannot provide individual answers relating to the tax consequences of the Spin-off for shareholders. A general description of tax consequences of the Spin-off for shareholders is included in the Spin-off Report in Chapter VIII. 2.d).
The prerequisite for the Spin-off was the carve-out, which was largely completed by the end of March 2020. Thus, the Siemens Energy Business was legally and organizationally consolidated under Siemens Gas and Power GmbH & Co. KG. Following the Spin-off resolution by the managing and supervisory board of Siemens AG on May 22, 2020, the shareholders of Siemens AG still had to decide on the Spin-off at an Extraordinary Shareholders' Meeting on July 9, 2020. The Spin-off of Siemens Energy was approved by a large majority of 99.36% of Siemens shareholders.
Siemens AG will initially remain a non-controlling anchor shareholder in Siemens Energy AG with a 35.1% shareholding. Additionally, the Siemens Pension Trust e.V. will hold a 9.9% stake in Siemens Energy AG. With the strategic and operational development of Siemens Energy AG and Siemens AG, Siemens AG intends to reduce its stake in Siemens Energy AG significantly in a timeframe of 12 to 18 months after the Spin-off taking effect.