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Carlyle Nears $2.4 Billion Deal for Siemens’s Flender Business

Aaron Kirchfeld, Dinesh Nair and Jan-Henrik Förster
·2 min read

(Bloomberg) -- Carlyle Group Inc. is nearing an agreement to acquire Siemens AG’s Flender mechanical drive unit for about 2 billion euros ($2.4 billion), according to people familiar with the matter.

The U.S. buyout firm and the German engineering giant are finalizing terms of the deal, which could be announced as early as this week, the people said, who asked not to be identified because discussions are private.

Carlyle outbid Canada’s Brookfield Asset Management Inc. in the end, the people said. Talks could still be delayed or fall apart. Representatives for Siemens, Carlyle and Brookfield declined to comment.

Siemens had been exploring a sale as well as a spinoff of the Flender business, which it bought from Citigroup Inc. in 2005. The unit makes gears and transmissions used in everything from cement production and shipbuilding to beermaking and offshore oil extraction. The company’s flagship products are 150-ton transmissions that connect wind turbine blades to generators.

A disposal of Bocholt, Germany-based Flender would mark one of the final acts by Siemens’s Chief Executive Officer Joe Kaeser to turn the industrial manufacturing giant into a more manageable entity for his successor Roland Busch. Last month, the company listed Siemens Energy AG, whose technology is behind roughly one-sixth of the world’s electricity.

Siemens declined as much as 0.9% in early Frankfurt trading on Monday, valuing the company at about 93 billion euros.

Kaeser had said he’d be “happy to listen” to any options for the Flender business beyond the initially planned spinoff, in an interview with Bloomberg TV in August.

The European industrials sector has been a bright spot for dealmakers in a drab year for mergers and acquisitions. There have been $124 billion worth of European transactions involving industrials companies so far in 2020, according to data compiled by Bloomberg. That’s 3% up on the same period in 2019.

(Updates with Siemens shares in sixth paragraph.)

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