Siemens Energy Pulls Out of Global Hydropower Joint Venture
In another effort to streamline its business, Siemens Energy has moved to relinquish a 35% stake in Voith Hydro, a hydropower-focused joint venture it had long held with German technology company Voith Group.
Munich-headquartered Siemens Energy and Heidenheim-headquartered Voith Group announced in separate releases on Oct. 22 that they had reached a mutual agreement to dissolve the joint venture and allow Voith to fully own Voith Hydro. The two parties both noted they agreed not to disclose the financial details of the transaction, which is expected to close near the end of the first quarter of 2022 if it garners necessary antitrust and other regulatory approvals.
The Voith Hydro joint venture was established in 2000, when Siemens and Voith merged their hydropower generator and turbine technology activities and expertise to better cater to the growing global hydropower market. When Siemens unbundled its energy businesses and spun off Siemens Energy in 2020, it transferred its 35% stake in Voith Hydro to Siemens Energy.
Siemens Energy has noted that while it was committed to decarbonization, its products include gas turbines, steam turbines, generators, transformers, and compressors. It also highlights its 67% stake in Siemens Gamesa Renewable Energy (SGRE), a major wind turbine manufacturer.
“With its portfolio Siemens Energy focuses primarily on transporting and storing energy, decarbonizing industrial processes, and generating electricity with little or no CO2 emissions. However, thus far the hydropower sector has had a subordinate role,” the company told POWER in a statement this week.
Dr. Jochen Eickholt, a member of Siemens Energy’s executive board, suggested the divestment may further simplify the technology firm’s sprawling offerings. “The transaction is further evidence that we’re consistently aligning our portfolio with our core business,” he said. “Less complexity, more efficiency—this is how we want to position Siemens Energy for the future.” The mutual agreement to transfer Siemens Energy’s shares to Voith, however, will also benefit Voith, he noted. Voith may now “pursue the expansion of hydropower in the electricity mix even more consistently, which is the optimal solution for everyone involved,” Eickholt said.
Voith told POWER in a statement its buy-out of Siemens Energy’s 35% stake in Voith Hydro would support its own ongoing strategy to strengthen its core business “in the field of sustainable technologies.” Voith’s strategy “will allow the company to consistently benefit from the growing role of hydroelectric power in the renewable energy mix and act as a trailblazer in the energy transition,” it said.
Voith Hydro will continue its efforts as a “full-line supplier for equipping hydroelectric power plants throughout the world,” it said. No personnel changes in the division’s management “nor elsewhere at Voith Hydro” are expected, it said.
“For a few years now, our strategy has been to tap into promising business fields in connection with the megatrends of digitalization and decarbonization and expanding our core business in this direction,” said Dr. Toralf Haag, president and CEO of Voith Group. “After a number of strategic acquisitions in our Paper and Turbo Group Divisions, we are pleased that with complete ownership of Voith Hydro, we will be able to drive the expansion of hydropower even further in the future.”
As Uwe Wehnhardt, president and CEO of Voith Hydro, explained, “The hydropower business has been a main pillar of Voith Group for more than 140 years. Today, it is considered to be the backbone of renewable energies and plays a key role in the decarbonization of our society in many regions of the world because of its grid-stabilizing effect. We, therefore, see great potential for sustainable profitable growth in Voith Hydro.”
Wehnhardt noted the joint venture was originally established as Voith Siemens Hydro Power Generation GmbH & Co. KG—an effort to “bundle the turbine knowledge of Voith with the generator know-how of Siemens in order to offer the entire power unit for hydroelectric power plants from a single source.” Voith Hydro’s business has expanded into a provider of “water to wire” solutions, “which means the original joint venture structure has little relevance for business operations anymore,” he said.
—Sonal Patel is a POWER senior associate editor (@sonalcpatel, @POWERmagazine).