Siemens to exit solar business

The activity includes Israeli company Solel, bought three years ago for $418 million.

Siemens AG (NYSE: SI; DAX: SIE) is selling its solar energy business, including in Israel, as part of its cost-saving measures, and it is already holding talks with potential buyers.

In Israel, Siemens employs scores of people at Siemens Solar Thermal Energy Ltd. (formerly Solel Solar Systems) in Beit Shemesh, and is a participant in the Ashelim thermosolar energy plant tender in the Negev. The company planned to hire hundreds of people had it won the Ashelim tender.

"Siemens intends to focus its renewable energy activities on wind and hydro power," the company said in a statement.

Earlier this month, Siemens announced that it intended to cut operating costs and fire employees as part of a restructuring plan, as competition in the company's areas of business was tougher than expected.

In October 2009, Siemens took the Israeli market by surprise, when it offered to acquire Solel Solar Systems for $418 million, after a bidding process that lasted several weeks. Siemens' bid was substantially higher than bids by its French rivals, Alstom SA (Euronext: ALO) and Areva SA (Euronext: CEI), and Israel's Shikun & Binui Holdings Ltd. (TASE: SKBN), which offered $275 million. Solel Solar, based in Beit Shemesh, manufactures thermosolar panels for the production of electricity at solar fields. Siemens agreed to pay the huge amount on the basis of its assessment of strong growth in the thermosolar industry, and because Solel Solar was one of the only two companies in the world with the know-how to produce thermosolar energy panels, alongside Germany's Schott AG.

Two years after the acquisition, foreign media reports said that Siemens would report a capital loss of $200 million on its investment in Solel Solar.

Published by Globes [online], Israel business news - - on October 22, 2012

© Copyright of Globes Publisher Itonut (1983) Ltd. 2012

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