Siemens to sell off nonmedical divisions

German industrial conglomerate Siemens AG took another major step toward restructuring when it unveiled a plan on Nov. 4 that includes the divestiture of businesses with annual sales of $10.2 billion. Unaffected by the restructuring is the company’s Medical Engineering Group, which continues to post an encouraging turnaround, according to the company.

Siemens AG president and CEO Heinrich von Pierer has been restructuring the company for the past year, shedding underperforming business units. This month’s news represents the most radical move yet in his campaign to reshape Siemens, however.

The bulk of Von Pierer’s plans involve the company’s Components group, which consists of operations in semiconductors, passive components and electron tubes, and electromechanical components. The semiconductors business will be spun off as an independent company, while Siemens is still examining its options for the passive components and electron tubes business. Siemens is also seeking a partner for the electromechanical components business. The businesses to be divested have annual sales of about $10.2 billion.

Siemens reported that operations in its Medical Engineering Group have improved significantly since the unit reported an operating loss last year. Medical Engineering reported annual sales of $4.5 billion, up 11% compared with sales from continuing operations last year. The group’s operating profit before taxes was $100.3 million, compared with a loss of $102.1 million the year before.