Siemens to sell mechanical and electrical drive business Flender to Carlyle for €2bn

Siemens has signed an agreement to sell Germany-based mechanical and electrical drive systems supplier Flender to the Carlyle Group for €2.025 billion.

Flender provides a range of gear units, couplings, generators, and related services. The company caters to wind power, cement, power generation, oil and gas, marine, water and wastewater, conveyor and crane technology, and other industries.

The company, which has a workforce of 8,600 staff, has a pro-forma revenue of about €2.2 billion in fiscal 2020.

The sale of Flender is expected to help Siemens in its vision of becoming a focused technology company.

As part of the same strategy, Siemens completed the separation of Siemens Energy last month.

The German engineering group combined Siemens Wind Energy Generation (WG) into Flender in early September 2020 in a move to bolster its business with wind turbine components.

Originally, Siemens was looking to spin-off Flender and seek public listing for the business. However, after securing the deal with Carlyle Group, Siemens has dropped the plans.

Siemens to divest mechanical and electrical drive business Flender to Carlyle for €2bn. Photo courtesy of Siemens Internet.

Ralf P. Thomas – Siemens Chief Financial Officer said: “Our original plan was to list Flender on the stock exchange through a spin‑off.

“Yet we’ve always been open for alternative solutions, too. The interest that numerous investors have taken clearly shows how attractive the company is and confirms the approach that we’ve been pursuing at our Portfolio Companies.

“The new ownership means that Flender will have the opportunities it will need in the future to optimize itself to an even greater extent and to address its customers’ requirements in an even more targeted way. Siemens and its shareholders will, in turn, benefit from further business focus and the attractive valuation and the inflow of liquidity.”

As part of the deal, Carlyle Group has agreed to make long-term and reliable commitments for Flender and also its employees, said Siemens.

Gregor Böhm – Carlyle Europe Buyout Managing Director and Co-Head said: “As a global leader in gear and drive technology with a unique product and service portfolio, Flender is ideally positioned for further growth. Our significant Industrials expertise, as well as extensive experience with carve-out transactions, positions Carlyle well to support Flender with its continued growth and innovation. We look forward to partnering with the company’s management team and employees to further build on the company’s success.”

The transaction is expected to be completed in the first half of 2021, once it gets the foreign-investment and antitrust approvals.