The novel coronavirus outbreak which has disrupted industries worldwide, and increasing shift towards renewable energy has taken a toll on the energy business of German multinational conglomerate Siemens AG. Given to sprawling business losses, Siemens has recently decided to give 55% of its energy business to shareholders following the unit’s spin-off in September 2020.

Following this move, the company plans to reduce its remaining 45% stake within 12 to 18 months after the shares are listed in September. It is expected to be one of the biggest IPOs held this year as companies have circumvent the market since the coronavirus outbreak spread globally.

Reports claim that Siemens has not given any details about the market capitalization of Siemens Energy, which previously had sales of $31.82 billion. Though, it is claimed that the Munich-based Siemens is stepping back from the gas and power business as customers continue to refrain from traditional fossil fuels and prefer renewable sources to generate electricity.

Siemens is investing around 110 million euros to wind-up its energy business and focus on sectors like factory automation, transport and smart buildings. Its share in the industrial sector has also plummeted over the past decade, as weaker performing units like power and gas have dragged on results.

Elaborating on the recent move, Siemens said that shareholders would attain one share in Siemens Energy for every two shares they hold in the company. It plans to pay out dividends of 40%-60% of net income, but does not guarantee to make a payout this year.

On a brighter side, Siemens’ hospital equipment business, Siemens Healthineers, reportedly recorded a 37% rise in stock since its market debut in March 2018. Joe Kaeser, CEO, Siemens AG, claims that the increase in value of its healthcare business validates their immense market potential which can further improve with increased focus.

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