U.S. private equity giant Carlyle Group has agreed to purchase Siemens AG’s mechanical-drive subsidiary Flender in a $2.4 billion deal, theGerman engineering firm announced on Thursday.
U.S. private equity giant Carlyle Group has agreed to purchase Siemens AG’s mechanical-drive subsidiary Flender in a $2.4 billion deal.
The German engineering firm is selling its mechanical drives business as part of its initiative to focus on factory automation, transportation and smart buildings.
According to Siemens, the outright sale of Flender would turn it into an independent company.
Carlyle’s acquisition of Flender would boost its growth and the proceeds of the deal would help Siemens in strengthening its balance sheet while focusing on industrial technology.
“By selling Flender, we’re successfully and rigorously continuing our strategy to become a new, focused Siemens AG,” Siemens CEO Joe Kaeser said in a statement. “Our plan of fixing the businesses ourselves by introducing the structures used in small and midsized companies has proven effective.”
Flender’s sale also marks Kaeser’s final attempt to turn Siemen into a more functional and manageable firm for his successor, Roland Busch.
The German firm is expecting the transaction to close in the first half of 2021 after gaining regulatory approvals.
Siemens announced earlier this year about its plan to spin off and publicly list Flender. However, the company decided that an outright sale for its mechanical drives business would be a more practical and quicker solution.