* Sells most of water technology activities to AEA Investors
* Deal is subject to regulatory approval
FRANKFURT, Nov 6 (Reuters) - Germany's Siemens agreed to sell the bulk of its water technology business toprivate equity group AEA Investors for 640 million euros ($862.4million).
The deal, flagged by Reuters last month, is subject toregulatory approval, Siemens said on Wednesday.
The announcement comes a day before new Chief Executive JoeKaeser presents the company's annual results. Investors havesaid they hope he will provide some clues as to his futurestrategy for the company.
Under his predecessor Peter Loescher, the industrialconglomerate whose products range from gas turbines to fasttrains and industrial automation software started sheddingassets to cut costs and close a gap with more profitable rivalssuch as Switzerland's ABB and U.S.-based GeneralElectric.
Siemens, Germany's second-biggest company by market value,said a year ago it would divest the water technology businessbecause most of it operates in a highly fragmented market,serving municipal and industrial clients, and so has little incommon with its global sales set-up.
The unit offers products ranging from conventional watertreatment to emergency water supply and water disinfectionsystems.
It generated $1.3 billion in revenue in 2012 and, accordingto estimates from bidders, its earnings before interest, tax,depreciation and amortisation (EBITDA) were between $70 millionand $80 million.
Siemens plans to keep some parts of the business.
"There are major synergies for these solutions as well aspromising growth potential within Siemens' EnvironmentalPortfolio," the company said in a statement.
Siemens built up its water business by bolting togetherseveral acquisitions over the last decade, including the watersystems and services division of U.S. Filter which it boughtfrom Veolia Environnement for $1 billion in 2004.
This year it spun off its lighting business Osram,sold its stake in mobile telecoms equipment maker Nokia SiemensNetworks and has been in talks to sell its postal automation andbaggage handling businesses.
Two people familiar with that transaction told Reuters lastmonth that Siemens was in advanced talks to sell the postalautomation and baggage handling businesses to private equityinvestor Triton, after investor Sun Capital dropped out.
- Mergers, Acquisitions & Takeovers
- AEA Investors