German industrial conglomerate Siemens said Tuesday it plans to spin off its struggling gas and power unit to prepare it for a potential stock market listing next year.
The division to be carved out comprises its oil and gas, conventional power generation, power transmission and related services businesses.
Siemens' Gas and Power (GP) unit is to be "given complete independence and entrepreneurial freedom through a carve-out and a subsequent public listing," Siemens said in a statement.
The GP unit with 44,000 employees in 2018 booked sales worth 12.4 billion euros ($13.8 billion) and 377 million euros in profit. But its profitability is declining year on year, due to falling demand for power plant equipment as a result of the global shift from fossil fuels to renewable energy.
The Munich-based parent company said it plans to give up its majority stake in GP and is preparing for a stock listing by September 2020.