Siemens and KKR agree E1.7bn deal

The German industrial conglomerate has completed the sale of an industrial portfolio to US private equity firm Kohlberg Kravis Roberts.

Siemens has completed the proposed sale of its portfolio businesses, acquired during the acquisition of Atecs Mannesmann group last year, to US private equity firm KKR for E1.69bn.

As expected, the portfolio includes Mannesmann Plastics Machinery, the gas spring producer Stabilus, Demag Cranes & Components and the harbour crane unit Gottwald – all of which belonged to the former Atecs Mannesmann group. Also included in the sale is the metering business of its Power Transmission and Distribution Group, the Ceramics Division of its Power Generation Group, and Network Systems, a regional service business belonging to its Information and Communication Networks Group.

KKR will pay just under E1.7bn for the portfolio, which will be owned by a new holding company, Demag Holding, in which Siemens will retain a 19 per cent stake. KKR will take the remaining 81 per cent stake in the portfolio, which has collective sales of E3.5bn and just under 23,000 employees.

Siemens had said earlier this year that it was looking to dispose of up to 50 businesses that it considered outside of its core telecom activities.

For KKR, the deal represents the first leg of a European double. Completion of the E3.7bn acquisition of French electronics Legrand is imminent and would take the firm’s European deal-making in July above the E5bn mark.

Financing for the transaction is being arranged by CIBC World Markets, HVB, and JP Morgan plc. Deutsche Bank acted as sole M&A advisor to KKR and CIBC World Markets provided advisory services. Siemens was advised by Goldman Sachs and Morgan Stanley.