Siemens Energy is moving to separate its Transformation of Industry division, setting the stage for a potentially significant reshaping of the German energy technology group around its faster-growing power generation and transmission businesses.

The company said Tuesday it has begun preparations for the legal and operational separation of Transformation of Industry, which employs around 17,000 people and generated €5.7 billion in revenue in fiscal 2025.

Once established as an independent company, Siemens Energy plans to explore a new ownership structure that could include outside investors or a capital markets transaction. The group ultimately intends to deconsolidate the business while maintaining what it described as a meaningful minority stake.

The separation would give the industrial unit greater autonomy over investment and strategy while allowing Siemens Energy to direct more capital toward power generation and grid infrastructure.

Transformation of Industry supplies equipment and services including industrial steam turbines, compressors, generators, motors, hydrogen electrolyzers and maritime and subsea technologies. Its customers span oil and gas, chemicals, process industries, cement, paper, data centers and shipping.

The division reported an 11.3% profit margin before special items in fiscal 2025, while comparable revenue grew 13.5%. Siemens Energy has forecast another 5% to 7% in comparable revenue growth for the unit in fiscal 2026, with a profit margin before special items of between 11% and 13%.

The unit also derives roughly half its revenue from services and has more than 85,000 installed units worldwide, giving the future independent company a sizable recurring revenue base.

Chief Executive Christian Bruch said the business has become profitable and is growing, but currently competes for investment with Siemens Energy operations offering faster growth and higher near-term returns.

That distinction has become increasingly important as electricity demand, data-center development and grid investment drive rapid expansion elsewhere in Siemens Energy's portfolio. Grid Technologies, for example, is expected to post comparable revenue growth of 25% to 27% in fiscal 2026, while Gas Services is targeting 16% to 18%.

The proposed carve-out would leave Siemens Energy more concentrated on those power-sector businesses, although its Siemens Gamesa wind operations would also remain within the group.

Transformation of Industry will initially operate under Siemens Energy's planned Omterra brand following its launch. The business has major manufacturing operations in Germany as well as facilities across Europe, the United States, India, China, Brazil and Saudi Arabia.

For energy markets, the separation is notable because it would create a sizable independent supplier to the oil and gas, industrial decarbonization, hydrogen and electrification sectors at a time when energy security and rising power demand are increasing investment across both conventional and lower-carbon infrastructure.

Siemens Energy generated €39.1 billion in revenue in fiscal 2025, meaning Transformation of Industry accounted for roughly 15% of group sales.

By Charles Kennedy for Oilprice.com

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