Strategic Realignment: Siemens’ ₹2,200 Cr Motors Divestment Signals Focus Shift and Innomotics’ Market Consolidation 

Siemens Limited has strategically divested its low voltage motors and geared motors business to Innomotics India Private Limited for ₹2,200 crore through a slump sale, a move necessitated by its global parent’s earlier sale of the underlying intellectual property to private equity firm KPS Capital Partners, which left the Indian entity without control of the core technology.

Advised comprehensively by Khaitan & Co on legal, tax, and regulatory aspects, this transaction allows Siemens to exit a non-core segment contributing minimally to profits and sharpen its focus on digital and sustainability-driven industry solutions, while simultaneously enabling Innomotics India, now a subsidiary of KPS-owned Innomotics GmbH, to unify and expand its end-to-end motor and drive portfolio in the growing Indian market, ensuring business continuity for customers and employees amidst a corporate realignment triggered by global restructuring.

Strategic Realignment: Siemens’ ₹2,200 Cr Motors Divestment Signals Focus Shift and Innomotics’ Market Consolidation 

In a significant corporate maneuver reshaping India’s industrial landscape, Siemens Limited has executed a definitive slump sale agreement to divest its Low Voltage Motors and Geared Motors business to Innomotics India Private Limited for ₹2,200 crore. This transaction, expected to close by June 2026 pending regulatory approvals, represents more than a simple asset transfer—it’s a strategic realignment driven by global corporate restructuring and localized market logic. 

The deal, structured as a “going concern” transfer on a cash-free, debt-free basis, underscores a fundamental shift in Siemens’ India strategy while consolidating Innomotics’ position as a comprehensive solutions provider in the electric motors domain. 

The Transaction at a Glance 

The financial and structural contours of this deal highlight its significance in the Indian industrial sector: 

The scope includes the design, development, testing, maintenance, and sale of low-voltage AC motors for direct-on-line applications, including various IEC-compliant models and customized variants, along with geared motors and all related customer service operations, spare parts, and ancillary products. 

The Global Backstory: A Strategic Domino Effect 

To understand this transaction’s true significance, one must trace the global strategic decisions that necessitated it. The divestment originates from Siemens AG’s May 2024 announcement to sell its global Innomotics GmbH business to KPS Capital Partners for approximately €3.5 billion. 

This global transaction completed on October 1, 2024, transferred all intellectual property rights of the motors business to KPS-controlled Innomotics GmbH. Consequently, Siemens Limited in India found itself operating a business for which it no longer owned the core technology or intellectual property. The Indian entity primarily functioned as “a sales organization with outsourced manufacturing” that relied heavily on technical agreements with what was now an independent global entity. 

As Siemens Limited’s board explained, the company “no longer has the necessary IP or technical capabilities to support the Low Voltage Motors business independently”. This created an operational dependency that made strategic divestment the most logical path forward. 

Legal Complexities and Multi-Disciplinary Advisory 

The transaction’s complexity is reflected in the extensive legal advisory structure assembled by Khaitan & Co, which guided Siemens through the entire process. Their team composition reveals the multifaceted nature of such corporate restructurings: 

• Core Transaction Team: Led by Partner Niren Patel with Partner Arindam Ghosh, Counsel Shashank Patil, Senior Associate Aman Bagaria, and Associate Vinita Jagtiani 

• Specialized Legal Support: 

• Employment law aspects: Anshul Prakash and Abhisek Choudhury 

• Competition law aspects: Anshuman Sakle, Anisha Chand, Tanveer Verma, Yatharth Vardhan Singh, and Shubhanshu Jain 

• Direct tax aspects: Rahul Jain 

• W&I insurance aspects: Harsh Khemka 

This comprehensive legal coverage underscores how modern M&A transactions require expertise spanning regulatory compliance, employment transitions, competition considerations, tax optimization, and risk mitigation through warranties and indemnities insurance. 

Strategic Rationale: A Divestment of Necessity and Focus 

For Siemens Limited, this divestment represents strategic pruning rather than distress selling. The business contributed approximately 6% to Siemens’ revenue from operations and just 2% to operating profit (excluding the demerged Energy business) for the twelve months ended September 30, 2025. 

Sunil Mathur, Managing Director and Chief Executive Officer of Siemens Limited, framed the transaction positively: “We are pleased to have found the right home for the business with Innomotics, ensuring continuity for our customers and employees. Given Siemens has limited synergies with the Low Voltage Motors business, this decision is in the best interests of all stakeholders”. 

The divestment allows Siemens to sharpen its focus on core technology areas where it maintains competitive advantage and intellectual property control, particularly in industry, infrastructure, and mobility solutions where the company continues to emphasize digital and sustainability transformations. 

Innomotics’ Strategic Expansion: Building a Complete Portfolio 

For Innomotics India, this acquisition represents strategic portfolio completion. As Satish Godbole, Executive Director of Innomotics India, stated: “Our business in India is now in perfect alignment with all other regions where Innomotics operates… With LV and Geared Motors included in our lineup, we can harness synergies within our various businesses, presenting an unparalleled value proposition to our customers”. 

The acquisition transforms Innomotics India from a specialized player into a comprehensive solutions provider with “an end-to-end portfolio spanning LV motors, geared motors, high-voltage motors and large drives”. This vertical integration creates significant cross-selling opportunities and strengthens the company’s positioning in India’s growing industrial automation market. 

Financial Dynamics and Valuation Metrics 

The ₹2,200 crore consideration represents approximately 2.3 times the business’s trailing twelve-month revenue of ₹967 crore and a significantly higher multiple of its ₹35 crore operating profit. The transaction’s “cash-free, debt-free” structure means Siemens transfers the business without any cash balances or debt obligations, with the ₹2,200 crore representing the enterprise value. 

Notably, the business being transferred reported a negative net worth of approximately ₹138 crore (₹1.38 billion) as of September 30, 2025. This negative equity position likely factored into the negotiation dynamics and final valuation. 

Market Reaction and Implementation Timeline 

Following the announcement, Siemens‘ shares experienced downward pressure, declining 3.60% to close at ₹3,204.70 on the BSE on December 8, 2025. This market reaction reflects investor calculations about the divestment’s impact on future revenue streams versus the immediate capital infusion. 

The transaction implementation follows a structured timeline: 

• Definitive Agreement Execution: Completed on December 8, 2025 

• Regulatory Approvals: Expected over the coming months, including potential Competition Commission of India clearance 

• Transaction Closure: Anticipated by June 2026 

The six-to-eight-month implementation period reflects the complexity of transferring a “going concern” with 89 dedicated personnel, customer contracts, supplier relationships, and operational continuity requirements. 

Broader Implications: India’s Evolving Industrial Landscape 

This transaction occurs against the backdrop of India’s accelerating industrial modernization and sustainability transition. Electric motors represent a critical component in energy efficiency initiatives across manufacturing, infrastructure, and commercial sectors. As industries strive for decarbonization and operational efficiency, demand for advanced motor systems continues to grow. 

The consolidation of motor technologies under Innomotics creates a formidable player in this space, potentially altering competitive dynamics in India’s industrial equipment sector. Meanwhile, Siemens’ refined focus on digitalization and smart infrastructure solutions aligns with India’s technological transformation across sectors. 

Conclusion: A Transaction of Strategic Necessity and Market Realignment 

Siemens’ ₹2,200 crore divestment of its Low Voltage Motors business to Innomotics India represents a corporate adaptation to global restructuring realities. What might appear as a straightforward divestment reveals itself as a carefully orchestrated strategic move necessitated by intellectual property realignments at the global parent level. 

For Siemens India, this transaction streamlines operations around core competencies where the company maintains technological leadership. For Innomotics India, it represents portfolio completion and market consolidation. For customers and employees, it promises continuity under an owner with deeper technological integration and strategic focus on the motors business. 

As India’s industrial sector continues its efficiency and sustainability transformation, this realignment of technological assets between two capable entities may well strengthen the ecosystem’s overall capability to deliver advanced electrification solutions. The transaction exemplifies how global corporate strategies inevitably cascade to local operations, creating both challenges and opportunities that reshape competitive landscapes in emerging economies.