The two companies are merging their operations in wind farms.
Siemens and Spain’s Gamesa agreed on Friday to create the world’s biggest builder of windfarms, with the German company paying 1 billion euros ($1.13 billion) for a majority stake in the combined business.
The group would bring together Siemens’ strength in offshore wind power and Gamesa’s leading role in developing markets.
Months in the making, the venture would overtake Denmark’s Vestas to become the world’s largest wind farm manufacturer by market share, operating in the mature North American and European markets and fast-growing markets such as India, Mexico and Brazil.
Engineering company Siemens, which has struggled to make its wind turbine business profitable, will take a 59 percent stake in the company but not have a majority on the board, Gamesa said in a statement to Spain’s market regulator.
In return for taking the leading role, Siemens will pay Gamesa’s shareholders, which include Spanish utility firm Iberdrola, 1 billion euros in cash in the form of an extraordinary dividend.
The businesses will be combined within Gamesa which will retain its Madrid listing. The Spanish group is creating new shares to be offered to Siemens, whose other products include trains, power network equipment and medical body scanners.
Cost savings and benefits from the new business, which will be operational by the end of the first quarter of next year, will be worth 230 million euros of earnings before interest and taxes (EBIT) within four years, Gamesa said.
The new company will have 21,000 employees and a total installed capacity of 69 GW, and the headquarters will be at Spain, announced Reuters.