GEA to Divest Heat Exchangers Unit to Focus on Food Business
GEA Group AG (G1A) is evaluating ways to divest its heat exchangers unit as the German maker of food-processing equipment seeks to focus on its main business.
GEA will dispose of the unit in the “medium term” as it sees limited potential for synergies with the rest of its business, the Dusseldorf-based company said in a statement. GEA expects to complete the separation by the end of 2014, a spokeswoman said by telephone. A share offering, spin off and sale are among options being considered.
“An intensive evaluation of all business units showed that our technologies for the foodstuffs industry and their application in alternative sectors have great growth potential,” Chief Executive Officer Juerg Oleas said in the statement. “We have to focus to grow our business.”
GEA, which was founded in 1881 as a metals trading company and today makes milking machines and beer-brewing kit, is facing declining sales in Europe, its biggest market with 35 percent of the total, as clients cut spending amid the region’s debt crisis. Sales in western Europe slipped 3 percent in the first quarter, while increasing 14 percent in North America and 5 percent in the Asia-Pacific region.
Operating earnings before interest and taxes at the heating exchangers unit declined 26 percent to 18 million euros in the first quarter as total operating Ebit slipped 2.2 percent to 73.1 million euros.
The company wants to increase the contribution of revenue from the food industry to 70 percent to 75 percent of the total, it said today.
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