Munich Siemens is pushing the sale of its traffic light technology division Yunex and, according to financial circles, has selected five bidders who can submit a binding offer until shortly before Christmas. Competitor Cubic – owned by the private equity firms Veritas Capital and Evergreen Coast Capital – has advanced into the second round of bids, as have the Italian toll road operator Autostrade, the financial investors KKR and Bridgepoint and the Czech industrial holding PPF of the family of billionaire Petr Kellner, who died in March.
Siemens did not want to comment on the information, the bidders also reject comments or were initially unavailable. Yunex offers solutions for intelligent road traffic control, from toll systems to traffic light controls.
According to Siemens, sales were last at more than 600 million euros, and incoming orders have grown by an average of eight percent in recent years. The company is now operating profitably.
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Siemens had renamed the former Siemens Traffic Systems on July 1st and emphasized that the unit should act with “entrepreneurial freedom”, pursue its own growth strategy and actively contribute to the consolidation of the market.
It was clear that Yunex could be sold since Siemens announced its independence last year. The division wants to “open up new opportunities” in the market, which is predominantly characterized by medium-sized competitors, said today’s CEO Roland Busch at the time.
Busch took over the chairmanship of the board in February as successor to Joe Kaeser. He made it clear early on that, following the spin-off of Energietechnik as Siemens Energy, he now wants to keep the core businesses together by and large.
Growing need for intelligent traffic control
However, further refinements should be made to the edges of the portfolio. Siemens is currently outsourcing the business with the large drives that are used in mining, for example. The unit with 7000 employees is the largest chunk of the so-called portfolio companies that no longer belong to the core business and are ready for sale or for partnerships. In addition, Siemens wants to sell its business with letter and parcel sorting machines.
Yunex benefits from the growing need for intelligent traffic control. “The rapid population growth is putting a heavy strain on transport systems and road networks in the world’s metropolises and the increasing congestion of the roads, the associated delays and air pollution are leading to significant losses in quality of life,” said Yunex CEO Markus Schlitt recently.
One can offer solutions here with the help of digitization and new technologies. Not only will this lead to greater availability and reliability in the area of mobility, the associated reduction in emissions will also ensure cleaner, more livable cities. “
Yunex is part of the Siemens rail division Mobility. This increased sales in the 2020/21 financial year (September 30) by a comparable three percent to 9.2 billion euros. With an operating margin of 9.3 percent, Mobility has not yet met the new medium-term goals of ten to 13 percent.
However, the rail sector has now been more severely affected by Corona. In the meantime, however, the demand is brisk again. In the fourth quarter of the 2020/21 financial year, Mobility increased incoming orders by a third to 2.8 billion euros.
Busch sees rail technology as a core business
In previous years there had been repeated speculation that Siemens could part with all of the railway technology. Under ex-boss Joe Kaeser, the division should merge with Alstom. The project, in which Busch was also a member of the board, failed due to the resistance of the cartel watchdogs.
In the meantime, some at Siemens are very happy about it. According to industry circles, this should also apply to Busch. Because the new European train giant would have been preoccupied with integration for a long time.
In addition, thanks to its strong position in signaling technology, Siemens sees itself quite well equipped for the time being to compete with the Chinese world market leader CRRC. In the longer term, however, it is considered possible in corporate circles that Siemens will still participate in the consolidation.
Busch sees rail technology, for which he was long responsible as a member of the board, as a prime example of how Siemens can combine hardware and software knowledge. He has emphasized several times that he sees mobility as a core business.
The correct list of the conglomerates is always an issue in the financial markets. Investors hope that in the event of a split or spin-off, the individual parts could be more valuable than the group of companies.
Most recently, General Electric announced that it would list the aviation, energy and health sectors independently on the stock exchange. Investors reacted enthusiastically.
When presenting the balance sheet, Busch was asked whether this could increase the pressure on Siemens to split up further and, for example, to separate the railway technology. “We are actually two steps ahead,” said the.
Years ago, from a position of strength, Siemens took the steps that GE is now taking. “I don’t see any need to change anything in our strategy.” Siemens is now a focused technology company. And for him, rail technology is clearly one of them.
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