German engineering group Siemens AG (ETR:SIE) intends to divest its Sweden-based security products business and has appointed investment bank Rothschild to advise it on the process, Bloomberg reported today citing three insiders.
The move is part of the company’s plan to sell slower-growth operations that are less synergistic with its core activities in a move to bolster its profits.
The target, which employs some 350 people, offers security cameras and access card readers, among other products. Last week, Roland Busch, head of the infrastructure and cities division, said that as a stand-alone entity, the security products business did not comply with the company’s focus on security solutions that are part of its building automation solution and therefore was not viable.
Siemens, whose shareholders already backed the planned spin-off of lighting maker OSRAM Licht AG, also intends to shed its airport luggage systems, mail automation and water technology businesses. Siemens spokesman Philipp Encz refused to comment on other possible sales of units. A spokesman for Rothschild also did not wish to comment.
Swedish truck maker AB Volvo (STO:VOLV-B) said it would pay CNY5.6bn (USD900m/EUR669m) for 45% in a new venture with Chinese peer Dongfeng Motor Group Company Ltd (HKG:0489), or DFG, in a move that would convert Volvo into the largest global heavy-duty trucks maker.
The venture called Dongfeng Commercial Vehicles (DFCV) will comprise most of DFG’s medium- and heavy-duty commercial vehicles operations, the buyer said. The deal, part of a strategic alliance between the two groups, will enhance Volvo and DFG’s positions, while ensuring great opportunities for both of them.
Volvo will contribute technological expertise and global presence, providing a significant potential to DFCV to expand and make profits outside China.
In turn, the Swedish group will become co-owner of China’s largest heavy-duty and medium-duty truck manufacturer, securing economies scales in terms of sourcing, development and production for its truck business, it said.
Completion is anticipated to take place in 12 months, pending clearance from Chinese regulators, among other conditions.
On a pro-forma basis, DFCV had net revenues of some CNY39bn and an operating profit of around CNY1.2bn, from the sale of about 142,000 heavy-duty trucks and 49,000 medium-duty trucks in 2011. It has some 28,000 employees.