Since 2024, many industrial giants have been involved in mergers and acquisitions, and have been on the road of buying. On May 17th, ABB Group announced that it had signed an agreement to acquire Siemens' switch socket business in China. Previously, ABB completed the acquisition of GE's industrial systems business for $2.6 billion, while Siemens, on the other hand, has been continuously divesting its traditional business and is on the road of selling and selling. So today, let's sort out Siemens' divestment path!
Siemens sells its switch socket business in China to ABB
On May 17, 2024, ABB Group announced that it had signed an agreement to acquire Siemens' switch socket business in China. It is reported that after the acquisition, ABB will acquire Siemens' distribution network in 230 cities across China, and its regional sales, production operations, and management expertise will further enrich ABB's service capabilities in this business. Siemens' switch socket business has a professional team of over 350 people in China, and achieved a revenue of over 150 million US dollars in China in 2023. This acquisition will have a positive impact on ABB's profits, and the transaction is expected to be completed within the next twelve months.
Sell Yinmengda to KPS
On May 16, 2024, the Siemens board of directors approved the sale of Siemens Innolux to KPS Capital Partners for € 3.5 billion. KPS's acquisition includes low-voltage motors, high-voltage motors, medium voltage drives, and other component products. The transaction is expected to be completed in the fourth quarter of 2024 or the first quarter of 2025. On July 1, 2023, Innovent was established as an independent entity in Germany. On March 1, 2024, Siemens (Shanghai) Electric Transmission Equipment Co., Ltd. officially changed its name to Innoda (Shanghai) Electric Transmission Equipment Co., Ltd.
Siemens sells low-voltage NEMA motor business
In May 2023, Siemens sold its low-voltage NEMA motor business to ABB. The transaction was initially announced on August 11, 2022, and the financial terms of the transaction were not disclosed.
Siemens SIMOTICS NEMA motors are unparalleled in reliability, robustness, compactness, efficiency, and performance. The SIMOTICS low-voltage motor product line covers various products ranging from 0.12-6500 Hp (0.09 kW-5 MW). These motors comply with IEC and NEMA standards and can be used directly online or combined with various SINAMICS drivers for driver based operations.
Building a super digital business platform
Siemens Xcelerator, this is an important step in Siemens' digital layout and a key milestone for Siemens to implement its strategy of accelerating high-quality growth. Xcelerator integrates Siemens' core software portfolio for digital industrial software with Mendix's multi experience application development platform, driving digital transformation and enabling anyone to easily create, integrate, and expand existing data and systems
The Xcelerator portfolio consists of multiple applications in the fields of Product Lifecycle Management (PLM), Electronic Design Automation (EDA), Application Lifecycle Management (ALM), Manufacturing Operations Management (MOM), Embedded Software, and the Internet of Things (IoT)
Composed of solutions.
Siemens Xcelerator consists of three components: business portfolio, ecosystem, and marketplace. This platform provides comprehensive data and integrates mechanical, electrical, and software fields, supporting interaction and cooperation between customers, partners, and developers. It also has the characteristics of flexibility and modernization, which can meet the digital needs of different enterprises.
Conclusion: From 'hard' to 'soft'
In fact, since announcing the launch of the Mindsphere system in 2017, Siemens seems to have gradually shifted its positioning from a hardware manufacturer to a software and service provider. Therefore, Siemens is busy splitting non core businesses while continuously acquiring industrial software companies to strengthen its core digital industrial business.
In the final analysis, starting from hardware products with lower gross margins and combining digitalization to create digital products has truly brought Siemens an increase in profit margins. Since 2017, Siemens' average gross profit margin has been 35.5%, compared to an average of 28.8% in the previous five years. This high value-added qualitative change gradually gave Siemens a mentality of being a "Big Tech" company. Therefore, in the past few years, the purpose of Siemens' business division and restructuring has been to get rid of products with lower profit margins and fewer digital opportunities in the product portfolios of major business departments.