Siemens AG will spend about €1 billion ($1.4 billion) to raise its stake in its booming Indian subsidiary Siemens Ltd, it said on Monday.
Siemens plans to raise its stake to 75% from about 55%, offering Rs 930 per share or a 28% premium to Friday’s closing price.
The offer sent Siemens Ltd shares up by more than 19.3% to touch an early-high of R868.0 on the Bombay Stock Exchange, before closing at Rs 854, a gain of 17.3% or 126 points."Siemens AG is making a voluntary offer to the public shareholders of Siemens for acquiring up to 66,829,060 fully paid-up equity shares of the company constituting 19.8% at a price of R930 per equity share in order to consolidate its shareholding in the target company," the company said in a filing to the Bombay Stock Exchange (BSE).
Pursuant to the completion of the offer, Siemens AG will hold 252,870,150 equity shares in Siemens, the filing said.
The company is expanding its stake with the aim of further developing its business in India.
The conglomerate is enjoying strong growth in business in emerging markets, with new orders from India alone up 160% in the latest quarter, boosted by infrastructure and power technology demand.
Siemens Ltd India had revenue of around €1.5 billion and profit from operations of around €200 million in 2010.
The move follows that of Swiss rival ABB Ltd, which last year raised its holding in its Indian subsidiary to 75%, paying $1 billion for the stake.
Siemens said that pending regulatory approval, the offer is expected to open on March 25 and close on April 13.
HSBC Securities and Capital Markets will manager the offer.