Siemens to Buy C&S Electric for Rs. 2,100 Cr.
Siemens Ltd., the flagship listed company of Siemens AG in India, has inked an agreement with one of India’s leading electrical and electronic equipment maker C&S Electric Ltd. Under the agreement, Siemens Ltd. will acquire 99.22 percent of the equity share capital of C&S Electric Ltd. worth Rs. 2,100 Cr. from its promoters. The agreement shall be subject to regulatory approvals. As per Bloomberg Quint article dated 27th January 2020, “The acquisition is likely to be completed by December 2020.”
About the Siemens Acquisition of C&S Businesses
Under the agreement, Indian operation of C&S Electric’s for low-voltage switchgear components and panels, low and medium voltage power busbars as well as protection and metering devices businesses will be acquired by Siemens Ltd. These entities would continue to operate under the brand name of C&S Electric. Other businesses of the company namely medium voltage switchgear and package sub-station, lighting, diesel generating sets, EPC and the Etacom busbars will be retained by the current owners.
Reasons for the Siemens Deal
As reported by Bloomberg Quint dated 27th January 2020, Nilesh Bhaiya, analyst at Motilal Oswal, said the acquisition is a reaction to the fear of losing market share in the switchgear business, especially after Schneider’s acquisition of L&T’s portfolio. In the same article, it is mentioned that “Siemens Ltd. will bolster its presence in the low-voltage switchgear business, especially in the building segment where it has a limited presence.”
As per the press release “In the future, Siemens envisions this partnership to pave the way for the establishment of a design and manufacturing hub in India, supporting the export of electrification solutions to fast-developing markets around the world.”
Comments from the Press-Release: Cedrik Neike, Member, Managing Board of Siemens AG and CEO Smart Infrastructure, said “Joining forces with C&S Electric allows us to bring a more comprehensive portfolio that addresses the needs of a very important market.”
Sunil Mathur, Managing Director and Chief Executive Officer, Siemens Ltd., said: “This will bolster our portfolio not only in India but also for export to competitive international markets in line with our growth strategy.”
About C&S Electric Ltd.: The company is in operation since 1966 and is headquartered in New Delhi. At present, it compromises of three manufacturing hubs located in Haridwar, Noida and Guwahati and one research & development center. The total strength of employees in the company is 5,000. In FY19, the revenue of the company was Rs 1,240 crore and the PAT was reported at Rs 52.7 crore.
About Siemens Ltd.: is the publicly-listed Indian arm of Siemens AG. Siemens Ltd. was founded in India in 1922. At present, Siemens has 22 factories located across India, eight centers of competence and 11 R&D centres. Siemens India manufactures high-voltage switchgear, switchboards, remote monitoring systems (RMS), relays and Smart Grid systems, transformers and other equipment.