Siemens is mulling a sale of its struggling gas turbine business, as the market shows no sign of recovery.
That’s according to a Bloomberg report quoting people who asked to remain unnamed. A sale is just one of the options on the table, with the company also looking at potentially combining with a rival.
Berenberg analyst Simon Toennessen put revenue this year at $6.5bn and said a sale would be the “best outcome for shareholders.”
The deliberations come after Siemens unveiled a plan in November to cut 6,900 jobs at the power and gas division and close some factories.
The unit, which produces giant turbines in Berlin, Charlottesville, Virginia and Finspong, Sweden, has suffered from a collapse in orders as the global energy industry shifts to renewable sources like wind and solar and away from large-scale power plants that run on fossil fuels. Finding a buyer may not be easy as competitors face similar issues.
Siemens Chief Executive Officer Joe Kaeser has previously said in interviews that the turbine activity isn’t part of the company’s future “industrial core.” That’s a reversal for a business that once held pride of place, with Siemens regularly taking visiting dignitaries on tours of the Berlin factory.
Siemens Chief Financial Officer Ralf Thomas told investors in March that he expects the market for large gas turbines to fall to 100 units in 2018, 10 percent less than the company had previously expected, according to analyst notes about the event.
The outlook for the global turbine business has faded since 2014 when GE and Siemens sparred over the fate of Alstom.
The potential acquirers for Siemens’s large turbine business, according to Berenberg’s Toennessen, are Mitsubishi Heavy, which could raise antitrust concerns with GE, or Shanghai Electric Group Co.