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Siemens is buying Indian electrical equipment maker C&S Electric in a 267 million euro ($296.21 million) deal, the German industrial group said on Friday.
The privately held New Delhi-based company makes low-voltage switchgear parts, metering devices and other products used to transmit and distribute electricity, Siemens said.
The C&S deal comes as Siemens reorganizes itself around its smart infrastructure and industrial automation businesses when it spins off its energy business this year.
C&S, which employs 5,000 people, had estimated sales of around 150 million euros in 2019, with an operating profit margin of 10% to 15%, Siemens said.
Andreas Matthe, chief executive of the low-voltage products business at Siemens’s Smart Infrastructure division, said buying C&S would help Siemens provide products for the Indian low-voltage market, which has been growing at around 6% per year.
Siemens wants to boost its presence in India’s home-building, construction and infrastructure sectors like airports, Matthe said.
“India is one of the fastest growing markets in the world, and there is so much to do in terms of infrastructure and improving the energy supply,” Matthe said.
But to tap into the trend, Siemens needed to provide locally produced, cheaper products, he added.
The acquisition will also provide a launchpad to export products to other Asian countries, a strategy identified by Siemens as a growth driver for its Smart Infrastructure unit.
“Safe, intelligent and reliable electrification is the backbone of economic and societal development,” said Siemens managing board member Cedrik Neike, who is responsible for Asia and leads the Smart Infrastructure business.
“Joining forces with C&S Electric allows us to bring a more comprehensive portfolio that addresses the needs of a very important market.”
Siemens will buy around 99% of the equity share capital under the agreement, which is subject to regulatory approvals.
The trains to industrial software maker, which is due to report its first-quarter earnings on Feb. 5, said it was also looking to set up a design and manufacturing hub in India following the completion of the acquisition.