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17 September, 2021

Siemens` new bid for VA Tech gets the OK

01 November, 2004

Siemens has renewed its bid for the Austrian engineering group VA Tech. As Drives & Controls went to press, it was looking likely that the deal would go ahead, despite earlier objections by the Austrian government.

When Siemens first made a bid for Austria`s biggest industrial employer in September, the government stepped in to block the deal. Siemens subsequently withdrew is bid and, under Austrian regulations, should not have been allowed to make a new bid for VA Tech for at least a year.

But at the beginning of November, Siemens made a new offer, valuing VA Tech at €825m. This was followed by several days of "intensive" discussions with Austria`s Takeover Commission, after which the commission waived its objections gave the deal the go-ahead. There is speculation that the prospect of a counter-bid from General Electric prompted the change of heart.

If Siemens does take control of VA Tech, one issue which will have to be resolved will be the future of high-power drives joint venture, formed recently by VA Tech`s Elin subsidiary and Schneider Toshiba Inverter

UPDATE: On December 18, the VA Tech board rejected Siemens` €55 per share offer as being "commercially inadequate". It said that valuations by its advisor JPMorgan and auditor Ernst & Young had shown that Siemens` offer does not reflect a projected income of €66m for 2005. Siemens already holds 15% of VA Tech and has until February 9, 2005, to obtain more than half of its shares.

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