Gamesa plan of energy supply sources in the future, © Gamesa

Now it has come to the final step with the loss-making Siemens Gamesa: Siemens Energy will fully integrate the 67.1% subsidiary, as was to be expected. The parent company is buying the remaining shares via a takeover bid for 18.05 EUR per share. As interim financing, a loan in the amount of 4 billion EUR was taken, which will surely be refinanced through the issuance of treasury shares – there’s talk of up to 2.5 billion EUR. Now, there can be – as similarly put in some commentaries – a crackdown, as not all figures at the subsidiary were so transparent and some calculations are now being reconsidered.The leveraging of synergies is now in the foreground. This could certainly strengthen the joint purchasing power for raw materials and parts (cost-cutting potential), which, however, may also bring with it reductions in staffing levels and thus a leaner personnel structure. So 30 percent of management positions will probably be eliminated, which is always done during takeovers and integration processes, to become leaner in the hierarchy and in the cooperation within the company, in particular through shorter decision-making pathways.

Cost reductions (synergies) in the amount of 300 million EUR a year should be quite possible. More importantly for me is the expectation that the various business divisions will be able to exploit existing synergies, for example in the area of hydrogen, more effectively. An example: A customer can then buy in addition to the wind turbine, offshore or onshore, the electrolyzer that produces hydrogen via wind energy – with all further possibilities of energy production (electricity, heat). As the H2 factory concept developed by Siemens Energy arranges: one-stop shopping – everything from one source.[…]

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Each investor must always be aware of their own risk when investing in shares and should consider a sensible risk diversification. The FC companies and shares mentioned here are small and mid cap, i.e. they are not standard stocks and their volatility is also much higher. This report is not meant to be viewed as purchase recommendations, and the author holds no liability for your actions. All information is based on publicly available sources and, as far as assessment is concerned, represents exclusively the personal opinion of the author, who focuses on medium- and long-term valuation and not on short-term profit. The author may be in possession of the shares presented here.

Author: Sven Jösting, written June 11th, 2022