Siemens unveils corporate overhaul, to float Osram

Thursday, 31 March 2011 01:30 - - {{hitsCtrl.values.hits}}

FRANKFURT: Siemens has unveiled a new management and corporate structure and said it would float light bulb unit Osram, in what amounts to the most radical revamp since 2007 for Europe’s biggest engineering company.

Siemens said that aside from its industry, energy and healthcare divisions, it would create a fourth sector: infrastructure and cities.

It is part of a series of moves undertaken by Peter Loescher -- an Austrian and the first CEO hired from outside the company.

Osram, the only business not bearing the Siemens brand, is estimated by analysts to be worth between 5 billion euros ($7.04 billion) and 7 billion. It is the world’s No. 2 lighting company after Philips and ahead of General Electric Co.

Loescher promised to slim down the lumbering giant which makes products varying from high speed trains to light bulbs, and has taken a more active spin-off strategy, selling IT unit SIS in December, as well as a minority stake in tank maker Krauss-Maffei Wegmann.

Analysts had long flagged the need for costly investments in the Osram unit. Analyst Andreas Willi of JP Morgan has said Osram needed to invest significantly to restructure over the next four years as most types of incandescent and some other light bulbs are phased out in Europe and elsewhere, requiring factory shutdowns.

“The potential listing is the most radical portfolio change that (Peter) Loescher will be undertaking,” Deutsche Bank analyst Peter Reilly said in response to media reports that Siemens would seek to float Osram.

Future Potential disposals could include stakes in turbine engine maker Voith Hydro and in networks joint venture SEN and in Nokia Siemens Networks .

Organisational changes also included the appointment of three new members to the company’s managing board.

Roland Busch , currently head of Corporate Strategies, will be chief executive (CEO) of the newly created Infrastructure & Cities Sector.

Klaus Helmrich, currently CEO of the Drive Technologies Division, will hold the managing board portfolio for Technology. Michael Suess , currently CEO of the Fossil Power Generation Division, will be CEO of the Energy Sector.

All three will assume their managing board positions on April 1, 2011, Siemens said in a statement.

Wolfgang Dehen, currently CEO of the Energy Sector, will leave the managing board of Siemens AG to become CEO of the executive board of Osram GmbH, Siemens added.

Osram is currently a subdivision of the industry division. The overhaul for Siemens follows German media reports speculating that Siemens would bundle together environment-related activities housed in industry and energy.