Siemens AG, Europe’s largest engineering company, agreed to sell part of its water-technologies division to AEA Investors for 640 million euros ($865 million) as it focuses on higher-margin businesses.
Siemens is retaining operations providing automation and drive solutions for the operation of water and sewage treatment plants, the Munich-based company said today in a statement.
“We’re pleased to have found a buyer with experience in industrial investments who wants to continue to drive Water Technologies’ business,” Siemens’s industry division head Siegfried Russwurm said in the statement. “We will in the future be focusing our water business on solutions in line with our electro technical core competencies.”
Siemens, which replaced Chief Executive Officer Peter Loescher with finance chief Joe Kaeser in August, is also selling other units as it focuses on businesses it deems to have better growth prospects. The water technologies unit, including wastewater, municipal services and industrial water purification services as well as membrane filtration systems, was put up for sale in 2012.
AEA Investors, a private-equity firm founded in 1968, focuses on investments in industrials, specialty chemicals, consumer products and services, according to its website. AEA’s middle-market private-equity team manages about $3.6 billion of invested and committed capital.
The units acquired by AEA comprise solutions for treating and processing water as well as the associated servicing capabilities, Siemens said today. The German company is also retaining water technology used in the oil and gas industry.
Bloomberg reported Siemens’s planned sale of the division to New York-based AEA on Oct. 15.
Siemens will report earnings tomorrow for the 12 months ended Sept. 30. The company has forecast income from continuing operations of 4 billion euros, including contributions from the solar business and networks joint venture stakes it has already sold.
Siemens had a profit margin of 9.5 percent in fiscal 2012, while ABB Ltd. and General Electric had margins of 10.3 percent and 15 percent, respectively. In August, Siemens’s debt was downgraded by Fitch Ratings, which cited an accelerating decline in the manufacturer’s margins in the most recent quarter and “insufficient progress” on restructuring measures.