Siemens to Supply Trains to Russia for 2014 Olympics

Jan. 4.10 | About: Siemens AG (SIEGY)


Siemens AG
(SI) won an order from the Russian Railways to supply 54 regional trains for the 2014 Winter Olympics in Sochi. The deal is valued at up to 580 million euros ($832 million).

A firm order worth around 410 million euros has been placed for the first 38 Desiro type trains, which will be manufactured entirely at the Siemens plant in Krefeld, Germany.

A preliminary contract has been signed for a further 16 units. These trains should then be partly built in Russia.

Siemens also announced that it will sell its 25% stake in Dräger Medical AG & Co. KG to majority shareholder Dräger. Ownership of the medical engineering company will then be fully transferred to Dräger. Proceeds of the sale will have a minimum value of about €250 million.

The sale proceeds include cash, credit and option components. After completion of the transaction, Siemens will receive €175 million in cash. Siemens will provide Drägerwerk AG & Co. with credit for a further €68.5 million. A five-year option agreement has also been reached, which will enable Siemens to receive additional proceeds of up to €50 million, depending on the development of the Drägerwerk preferred share. The option is currently worth €6.5 million.

Siemens AG, an electronics and electrical engineering company, operates in the industry, energy, and healthcare sectors worldwide. In the healthcare sector, it develops, manufactures, and markets diagnostic and therapeutic systems, devices, and consumables; and offers IT systems for clinical and administrative purposes. The company was founded in 1847 and is headquartered in Munich, Germany. Its major competitors include ABB Ltd. (NYSE:ABB) and General Electric Co. (NYSE:GE).