Siemens Share Price Surges 5% as Shareholders Reject Sale to Parent Company
Siemens, the German multinational conglomerate, experienced a significant boost in its share price, surging over 5% to reach a 52-week high. The increase came after the company’s shareholders rejected the proposed sale of its low-voltage motors division to the parent company.
On Monday’s trading session, Siemens’ share price opened at an intraday low of ₹3,902.55 apiece on the Bombay Stock Exchange (BSE). However, it quickly gained momentum and hit an intraday high of ₹4,066.10 per share. This surge in share price indicates positive market sentiment and investor confidence in the company.
The rejection of the sale was announced in an exchange filing by Siemens on Friday. According to the filing, nearly 74% of the votes cast were against the proposal to allow the transactions between Siemens and its subsidiary, Siemens Large Drives India Private Ltd.
In May, Siemens’ board of directors had approved the sale and transfer of its low-voltage motors and geared motor businesses to Siemens Large Drives India, which is a division of Siemens AG. The agreement, valued at ₹2,200 crore, was scheduled to take effect on October 1st, 2023, pending approvals from shareholders, statutory organizations, and regulatory agencies.
However, the shareholders’ rejection has put a halt to the proposed sale. The company had also mentioned in a filing back in May that it would consider paying out 100% of the sale consideration as a special dividend after the completion of the transaction.
Siemens’ share price performance over the past year has been notable. According to trendlyne data, it has risen by 46.3%, albeit underperforming the sector by 24.5%.
Rajesh Bhosale, Equity Technical and Derivative Analyst at Angel One, commented on the current situation, stating, Siemens’ share price today has seen a gap up opening and has surpassed its May swing high of 3938. Overall momentum is positive, supported by volumes. We expect this upward move to continue, with 4200 being the next target in the near term. Immediate support is at 3840.
This development has not only impacted Siemens’ share price but also created a buzz among investors and market observers. As the company navigates this unexpected turn of events, it remains to be seen how it will proceed with its strategic plans.
