Siemens Energy: A €2.5 Billion Grid Deal and a Radical Spin-Off Reshape the Narrative

Siemens Energy wins €2.5B North Sea grid contract and plans spin-off of AI-critical industrial unit, aiming to become pure-play electrification firm; stock up 37% YTD.

Siemens Energy is executing on two fronts — one aimed at immediate growth, the other at long-term structural change. The Munich-based group has secured a major offshore grid contract while simultaneously moving to spin off a business unit that has become central to the artificial intelligence infrastructure boom.

The North Sea Connector 2 project, awarded by transmission system operator 50Hertz, sees Siemens Energy partner with Neptun Smulders Offshore Renewables. The consortium will build a 2-gigawatt offshore grid connection system, including a sea-based converter platform and an onshore station near Schwerin. Commissioning is scheduled for the end of 2034. If 50Hertz exercises an option for a second platform, the total contract value for the consortium would reach roughly €2.5 billion. Almost all value creation from Siemens Energy’s portion will remain in Germany.

Parallel to that operational win, the company is pushing ahead with a portfolio overhaul that has electrified investors. Reports indicate Siemens Energy is exploring a separation of its “Transformation of Industry” unit, which manufactures steam turbines and compressors — components critical for cooling and powering the massive data centers that underpin the AI boom. Order books at that division are reportedly filled years out. The logic: by shedding the oil-and-gas legacy tied to that business, Siemens Energy would become a purer play on electrification, more comparable to US rival GE Vernova, which commands a significantly higher valuation. To further sharpen its focus, the group is also pursuing the acquisition of Northern Ireland’s Camlin Group, adding expertise in power grid digitalisation. Antitrust approval is still pending.

The market has rewarded the dual narrative. Siemens Energy shares closed Friday at €168.88, leaving them more than 37 percent higher since the start of the year. The stock is trading just around its 50-day moving average but sits a comfortable 22 percent above its long-term trendline. The 52-week high of €195.54 is now within sight.

Deutsche Bank Research reiterated its “Buy” rating last week with a €200 price target, pointing to the ongoing restructuring and earnings improvement as key catalysts. The next quarterly report, due August 5, will reveal how far profitability gains at the troubled wind subsidiary Gamesa have progressed. A recent visit by a Qatari economic delegation to Siemens Energy’s Berlin gas turbine plant also hints at potential international cooperation.

Investors will have plenty to digest as the new trading week begins. Monday should see the €2.5 billion 50Hertz order priced into the stock, while market participants await official details on the planned spin-off of the industrial division. If positive momentum holds, the path back to the year’s peak looks increasingly manageable.