Siemens AG is to acquire the solar thermal power company Solel Solar Systems Ltd. To date, the majority stake has been held by Ecofin Ltd., a London-based investment firm, and another major shareholder.
“After the rapid and highly successful expansion of our wind power business, we now want to continue this success story in the solar sector. With the acquisition of Solel, Siemens can now strengthen its market position in the promising business of solar thermal power plants. We can thus further expand our extensive Environmental Portfolio – and, as already announced, we will become even greener,” said Siemens President and CEO Peter Löscher. Solel Solar Systems has a workforce of over 500 and is one of the world´s two leading suppliers of solar receivers, which are key components of so-called parabolic trough power plants.
The high-growth company, which posted revenue totaling almost USD90 million in the first six months of its current fiscal year (January 1 to June 30, 2009), is also a leader in the planning and construction of solar fields. The purchase price is about USD418 million (currently equivalent to around USD284 million, *1). The transaction is subject to approval by the responsible authorities. It is anticipated that the closing will take place before the end of this calendar year.
Solel is a successful company in the future-oriented solar power sector, with decades of experience in the development and manufacture of solar field equipment and the planning and construction of solar fields. Since 2006, Solel has also been present on the Spanish market, supplying key components for 15 solar thermal power plants with a combined capacity of 750 megawatts. In addition, the company is also active on the important U.S. market.
“Siemens and Solel are a perfect match,” said René Umlauft, CEO of Siemens’ Renewable Energy Division. “We are the market leader in steam turbines for solar thermal power plants and, with the power block, we can offer a key part for solar power plants – the part that is responsible for power generation. Solel boasts high-efficiency receiver technology and comprehensive expertise in the engineering and construction of solar fields. In the future, we’ll be able to offer the key components for the construction of parabolic trough power plants from a single source and to further enhance the efficiency of these plants.”
Until 2020, the market for solar thermal power plants will show annual double-digit growth rates and attain a volume of over EUR20 billion. In the future, the primary focal growth regions will be the U.S., South Africa, Australia, Spain, India, North Africa and the Middle East.
“Together, we will utilize our know-how in these core competencies to further optimize the water/steam cycle and to further boost the efficiency of solar thermal power plants. Thus we can accelerate the use of this clean technology,” said Avi Brenmiller, CEO of Solel Solar Systems. “Combined with Siemens’ financial strength and its global sales and marketing activities, this will open up promising prospects for our business and hence also for all of Solel’s employees.”
Parabolic trough power plants are the solar-based power generation technology with the best track record of all utility-scale solar technologies. They are particularly suitable for regions with high levels of direct insolation. The principle is simple: curved sun-tracking mirrors capture the sunlight and concentrate it on the solar receiver. A heat transfer medium, which is heated by the concentrated solar radiation, flows through the solar receiver. In a heat exchanger, steam is then generated for a steam turbine, which drives a generator, which in turn generates electricity. Together with the electrical and instrumentation and control equipment and the cooling systems, these components form the power block of a solar power plant.
Products and solutions for solar thermal power plants are part of the Siemens Environmental Portfolio, with which the company posted revenue of nearly EUR19 billion in fiscal 2008 – about a quarter of Siemens’ total sales – making Siemens the world’s leading provider of ecofriendly technologies.
*1) At a USD rate of 1.47
Siemens AG (Berlin and Munich, Germany) is a global powerhouse in electronics and electrical engineering, operating in the industry, energy and healthcare sectors. The company has around 410,000 employees (in continuing operations) working to develop and manufacture products, design and install complex systems and projects, and tailor a wide range of solutions for individual requirements. For over 160 years, Siemens has stood for technical achievements, innovation, quality, reliability and internationality. In fiscal 2008, Siemens had revenue of EUR77.3 billion and a net income of EUR5.9 billion (IFRS). Further information is available on the Internet at: www.siemens.com.
The Siemens Energy Sector is the world’s leading supplier of a complete spectrum of products, services and solutions for the generation, transmission and distribution of power and for the extraction, conversion and transport of oil and gas. In fiscal 2008 (ended September 30), the Energy Sector had revenues of approximately EUR22.6 billion and received new orders totaling approximately EUR33.4 billion and posted a profit of EUR1.4 billion. On September 30, 2008, the Energy Sector had a work force of approximately 83,500.This document contains forward-looking statements and information – that is, statements related to future, not past, events. These statements may be identified by words such as “expects,” “looks forward to,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “will,” “project” or words of similar meaning. Such statements are based on the current expectations and certain assumptions of Siemens’ management, and are, therefore, subject to certain risks and uncertainties. A variety of factors, many of which are beyond Siemens’ control, affect Siemens’ operations, performance, business strategy and results and could cause the actual results, performance or achievements of Siemens to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements. For Siemens, particular uncertainties arise, among others, from: changes in general economic and business conditions (including margin developments in major business areas and recessionary trends); the possibility that customers may delay the conversion of booked orders into revenue or that prices will decline as a result of continued adverse market conditions to a greater extent than currently anticipated by Siemens’ management; developments in the financial markets, including fluctuations in interest and exchange rates, commodity and equity prices, debt prices (credit spreads) and financial assets generally; continued volatility and a further deterioration of the capital markets; a worsening in the conditions of the credit business and, in particular, additional uncertainties arising out of the subprime, financial market and liquidity crises; future financial performance of major industries that Siemens serves, including, without limitation, the Sectors Industry, Energy and Healthcare; the challenges of integrating major acquisitions and implementing joint ventures and other significant portfolio measures; the introduction of competing products or technologies by other companies; a lack of acceptance of new products or services by customers targeted by Siemens; changes in business strategy; the outcome of pending investigations and legal proceedings, including corruption investigations to which Siemens is currently subject and actions resulting from the findings of these investigations; the potential impact of such investigations and proceedings on Siemens’ ongoing business including its relationships with governments and other customers; the potential impact of such matters on Siemens’ financial statements; as well as various other factors. More detailed information about certain of the risk factors affecting Siemens is contained throughout this report and in Siemens’ other filings with the SEC, which are available on the Siemens website, www.siemens.com, and on the SEC’s website, www.sec.gov. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in the relevant forward-looking statement as expected, anticipated, intended, planned, believed, sought, estimated or projected. Siemens does not intend or assume any obligation to update or revise these forward-looking statements in light of developments which differ from those anticipated.
Alfons Benzinger | Siemens Energy
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