Energy
Siemens, Mitsubishi Heavy Consider Joint Bid for Alstom Assets
FRANKFURT — Siemens AG will decide by Monday whether to bid for the energy assets of France’s Alstom SA and exit the train business, marking a strategic shift. But big course changes are routine for the 166-year-old company, which started in the telegraph business.
Over the past two decades, Siemens has shed divisions making computers, phones, cellphone networks, light bulbs, car parts and semiconductors while becoming a world leader in wind turbines. The German industrial conglomerate said Wednesday it would work with Japan’s Mitsubishi Heavy Industries Ltd to assess a potential pitch for the Alstom operation.
Siemens’s willingness to unload what had been considered core assets is a hallmark of its desire to invest in industries where it holds a technical edge or it sees growth prospects. Managers display little emotion toward operations, sometimes selling only a few years after entering a field, and seek partnerships to share costs for operations that lack synergy with the rest of the group.
Siemens and Mitsubishi last month, for example, struck a joint venture combining their metals subsidiaries. A day earlier Siemens said it would buy most of Rolls-Royce Holdings RR.LN -5.48% PLC’s energy division and said it would consider listing shares in its own health-care unit.
The medical unit, which makes hospital equipment such as X-ray scanners and ultrasound machines, could represent an even bigger deal for Siemens than the Alstom transaction, which is preliminarily valued at up to €11 billion ($14.9 billion). Siemens’s health-care unit accounts for more than one-third of the company’s €84 billion total market value, analysts estimate.
Siemens invited Mitsubishi to join its appraisal of Alstom, which has tentatively approved a bid from General Electric Co. GE -1.00% GE’s offer values Alstom’s energy and rail divisions at $17 billion, but French government officials have objected to the U.S. company controlling what they see as strategic national assets. Mitsubishi’s participation could help Siemens allay European antitrust concerns while putting more heft behind its offer.
Siemens has completed due diligence of Alstom, Siemens Chief Executive Joe Kaeser said recently. “We will make up our minds what that means for us,” he said. “There are opportunities and risks.”
Siemens buys and sells assets frequently, and many of its moves have been shrewd.
In 1999 the company sold shares in Epcos AG, a maker of electronic components, when the electronics industry was booming. A year later Siemens floated 29% of chip-making subsidiary Infineon AG through an initial public offering and another stake soon after. Infineon shares shortly lost almost 65% of their value and haven’t recovered.
In 2005, Siemens paid Taiwan-based BenQ Corp. of Taiwan €250 million to take over the German company’s cellular-handset division. A year later, BenQ sought bankruptcy protection for the unit.
Siemens in 2007 sold its VDO car-component unit to German car-parts maker Continental AG for €11 billion, just before the European car market hit a multiyear skid.
In 2008, Siemens contributed its corporate phone-system business to a joint venture with Gores Group LLC. The combined company, now called Unify Inc., said this month it would slash half its workforce as demand drops for traditional phone systems.
Siemens that same year transferred its cordless-phone unit to Arques Industries AG of Germany at undisclosed terms. Shares of Arques, which later renamed itself Gigaset AG, have plunged to around €1 from above €6 at the time of the deal.
Not all of Siemens’s moves have been so well-timed. It started to exit the cellular-network business in 2007 by entering a joint venture with Finland’s Nokia Corp. But it took six years for the German company to extricate itself completely. That was too late, because prices already had peaked, said Christoph Niesel, a fund manager with Germany’s Union Investment, which holds a stake of around 1% in Siemens.
Siemens last year spun off light-bulb maker Osram Licht AG, and its shares peaked this March at more than twice their listing price. That gain could have gone to Siemens shareholders had the company waited to make the listing, Mr. Niesel said.
Now Mr. Kaeser faces similar concerns over timing. Siemens said it contributed its division that builds steel plants to the joint venture with Mitsubishi because of “the challenging market environment and high price pressure.”
Siemens’s rail division, which Mr. Kaeser has proposed giving to Alstom as partial payment for the French company’s energy division, and the rest of Siemens’s transportation-and-logistics operation was unprofitable in the fiscal year through September.
The health-care division, in contrast, is very profitable but lacks synergies with Siemens’s other businesses. Mr. Kaeser has indicated that he sees potential takeover targets in the sector but that they are at higher values than he is willing to pay. Listing stock in the medical division would allow him to pay for acquisitions with the shares.
“We would float health care in parts and then be able to acquire companies with similar multiples,” he told investors recently.
– WALLSTREET JOURNAL
In line with its commitment to driving access to quality petroleum products, Asharami Synergy Limited, a leading Sahara Group downstream company, has said the public can now access exceptional fuelling solutions at its newly commissioned retail station in Omagwa, Rivers State.
Situated strategically along the Airport Road in Omagwa, the station, which features a storage capacity of 45,000 litres each for Automotive Gas Oil (AGO, also known as diesel) and Premium Motor Spirit (PMS, also known as petrol) is equipped with two pumps and four discharge nozzles for PMS and AGO.
The facility also has ample space for sundry services in a bid to ensure consumers get more “miles and smiles” as well as the energy to “go further” with Asharami’s world-class products.
“The Asharami Omagwa Retail Station is fully operational, offering a range of premium products and services. It’s a one-stop shop that also gives our esteemed customers eat-in and take-out restaurant services, shopping, as well as the Asha lubricants and Asha Service experience which will ensure premium care for all classes of automobiles and engines,” said Oladimeji Williams, Head, Government Relations and Business Development at Asharami Synergy.
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At the Commissioning, Willaims said the new station represents an important step in Asharami Synergy’s expansion plan aimed at reaching and serving more communities responsibly. “This station is strategically positioned close to the airport, serving as the gateway for powering socio-economic development in the community and those close to it, while enabling Asharami Synergy integrate all aspects of its downstream business towards ensuring efficiency and value for our customers,” he stated.
Williams commended the Federal Airport Authority of Nigeria (FAAN) and the Omagwa community leaders for their support and collaboration throughout the project’s duration, describing it as a “seamless and productive process that highlights Asharami’s corporate stewardship and social impact” in the community.
Similarly, Ifesinachi Ezike, Regional General Manager (South South), FAAN, emphasized the broader significance of the new station, stating, “This occasion marks a significant milestone not just for Asharami Synergy but for the airport and the entire community. It marks not just an opening of a new facility but the beginning of a renewed commitment to enhancing the travel experience of all our passengers and stakeholders”.
In a move that underscores its commitment to sustainability and community development, Asharami Synergy also commissioned a solar-powered borehole during the launch. The borehole is set to improve access to clean and reliable water for residents, marking a tangible contribution to the local community.
“At Sahara, we are always making a difference—not just through our business operations; we are unwavering in our commitment to driving sustainable development and building partnerships that enhance the well-being of our host communities,” Williams added.
The Shell companies in Nigeria and staff won awards in recognition of their robust participation at the 42nd Annual International Conference and Exhibition of the National Association of Petroleum Explorationists (NAPE), held in Lagos.
At the closing dinner of the event, the Managing Director of Shell Nigeria Exploration and Production Company (SNEPCo), Ronald Adams pledged sustained efforts by the company to address “the Nigerian energy trilemma by powering progress towards energy security in a sustainable manner”.
On the awards, the Shell was declared Best Overall Exhibitor and Best Exhibiting Energy company (International) just as Geophysicist Somime Oguntola took home the Award of Excellence for Oral Paper (second place).
The icing on the cake was a Shell staff, Johnbosco Uche, being installed as the new President of the NAPE.
It was gathered that the Shell companies in Nigeria have supported NAPE since its founding in 1975, using the skills and expertise of the large pool of energy professionals in its employment to improve its activities especially educational and mentoring programmes.
In addition to being a major sponsor of the 2024 conference, Shell mounted a high-profile exhibition, featuring among other things, career counselling, engagements on Nigerian Content and Contractor development and panel sessions on Women in Industry and Sustainability Energy Challenge.
A highlight was the Shell medical stand which attended to more than more than 500 conference participants and members of the public over the four days of the annual event. The doctors and nurses offered a wide range of services including laboratory tests, deworming, medical consultation as well as ophthalmology checks and distribution of nearly 300 eyeglasses.
Adams referred to the operations of SNEPCo as an example of Shell’s contribution to energy security in Nigeria. “As a result of sustained production from Bonga, we have provided funds to finance development, created a new generation of Nigerian Deepwater professionals, empowered indigenous contractors and service providers, and implemented social investments that have touched lives in the six geo-political zones of the country,” he said.
Adams added, “SNEPCo and indeed Shell are in Nigeria for the long haul. Our commitment is reflected in both our current and growth plans, all of which are grounded in principles of safety, affordability, and competitive performance.”
Owing to the persistent power outage, which has crippled economic and social life in most parts of Akwa Ibom State and environs, Accugas Limited has washed its hands off the ugly situation.
This was contained in a statement under the signature of its Communications Manager, Okwudili Onyia, in which the company traced the anomaly to a “fault in the 132-KV Aba-Itu transmission line”.
To ameliorate the situation, the company maintained that “It is imperative that the restoration of the Aba-Itu line is completed as soon as possible.”
In addition, the company pledged thus, “Accugas will continue to partner with, and support, the government of Akwa Ibom State towards achieving the government’s agenda for economic development and prosperity of the state.”
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The statement reads, “Accugas Limited, a subsidiary of Savannah Energy, wishes to strongly deny the misinformation concerning its alleged involvement in the current power outage in Akwa Ibom State.
“The power cut in Akwa Ibom State is entirely due to the reported fault in the 132-KV Aba-Itu transmission line, which, unfortunately, is preventing power being transmitted from the National Grid into the State. It is imperative that the restoration of the Aba-Itu line is completed as soon as possible.
“Ibom Power Company (“IPC”) is one of 23 thermal power generation companies which channel power to the National Grid, which in turn disseminates all accumulated power to each State of the Federation through the electricity distribution companies (“Discos”). Indeed, Accugas supplies gas to enable c. 20% of Nigeria’s thermal generation capacity and, as such, is a critical enabler of the Nigerian economy.
“Within Akwa Ibom State, Accugas has been the sole supplier of gas to IPC since 2014 and, together with other Savannah subsidiaries, has invested over US$1.5 billion in gas development within the state. Furthermore, Savannah has recently invested c. US$45 million in a gas compression project at Accugas’ Uquo central processing facility at Esit Eket. Accugas’ commitments also extend to several social investment projects in the state. All the foregoing investments and projects, including other imminent investments Accugas intends to make in the State, demonstrate the Company’s long-term commitment to Akwa Ibom State and Nigeria.
“Accugas will continue to partner with, and support, the government of Akwa Ibom State towards achieving the government’s agenda for economic development and prosperity of the state.”
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