German engineering giant Siemens AG yesterday said that it would abandon the sale of its baggage handling and postal automation business after failing to strike a deal with potential buyers.
Siemens will now keep the unit as an independent business within the company and will be run by current head of the locomotive division, Michael Reichle.
''Siemens no longer intends to sell its baggage handling and parcel and postal sorting activities. The activities are to be further operated as a separate business under the Siemens umbrella. "I've made it clear again and again that we have to get our businesses in order again ourselves. We'll do this in the case of postal automation and airport logistics. We'll set up the company so it can operate better and more flexibly in its medium-sized competitive environment," said Siemens president and CEO, Joe Kaeser.
In November 2012, the Munich-based company had said that it plans to sell the units since these units have very limited synergies with its other business.
While announcing plans to hive-off the business, Joerg Ernst, CEO of Siemens' Logistics and Airport Solutions Unit, had said, "Whilst favourable market conditions, innovative strength and good profit results of Siemens' logistics activities, we are convinced, that a different ownership structure taps this business's full potential."
Reuters had earlier reported that Siemens has received initial bids from German private equity firm Triton and US investment groups Gores and Platinum.
A sale would have fetched fetch the German conglomerate around $390 million.
The Siemens logistics business employs around 3,600 people and generates revenue of approximately €900 million.
The baggage handling, postal and parcel sorting activities are bundled in the business unit Logistics and Airport Solutions with its headquarters in Constance.
The core business comprises a comprehensive portfolio in the areas of mail and parcel logistics and automation, airport logistics with baggage handling, air cargo handling and IT solutions as well as the overall customer services that supports customers in their daily operations.
The business includes systems and information technology solutions like software modules, material flow optimization, supply chain management, e-business, warehouse and cargo management systems.
Siemens said that it would carve-out of the baggage handling and parcel and postal sorting activities as a separate company in the coming months and will provide the company with a solid financial basis so that it can further develop and expand its product portfolio.