FRANKFURT Siemens AG (SIEGn.DE) is in advanced talks to sell its water technologies unit to private equity group AEA Investors for about $800 million, two people familiar with the transaction said.
New-York based AEA beat private equity investor American Industrial Partners in the last round of the bidding, one of the sources said.
Siemens, which ranks as Germany's most-valuable company by market capitalization and makes products ranging from trains to hearing aids, announced last November its intention to divest the water technologies business.
The industrial conglomerate said at the time it wanted to focus on its most profitable assets - its fossil power generation business, which makes gas turbines and power plants, and its industrial automation business.
It said the bulk of the water technologies unit operated in a highly fragmented market, serving municipal and industrial clients, and so had little in common with Siemens' global sales setup.
The unit offers products ranging from conventional water treatment to emergency water supply and water disinfection systems.
It generated $1.3 billion in revenue in 2012, and according to estimates from bidders its earnings before interest, tax, depreciation and amortization (EBITDA) was between $70 million and $80 million.
The sources asked not to be identified because details of the auction are confidential.
Siemens built up the water unit by bolting together several acquisitions over the last decade, including the water systems and services division of U.S. Filter which it bought from Veolia Environnement (VIE.PA) for $1 billion in 2004.
Separately, Siemens is in advanced talks with private equity investor Triton on the sale of its postal automation and baggage-handling division unit, after investor Sun Capital dropped out of the bidding, two sources familiar with that transaction said.
Triton is currently in talks with German state bank KfW KFW.UL over debt guarantees that suppliers of the industry's large machinery generally have to provide, the two sources said. These are to cover pre-installation performance guarantees and warranties once the machines have started operating.
Another auction of a smaller Siemens unit is also at an advanced stage.
Siemens has mandated HSBC to organize the sale of its wiring accessories unit and several peers including ABB ABBN.VX, Schneider (SCHN.PA), Legrand (LEGD.PA) and Asian companies have already handed in final bids valuing the company's equity and debt at 150-200 million euros, two people familiar with that transaction said.
Siemens declined to comment on the sale of its water tech and postal automation unit. A company spokesman was not immediately available to comment on the sale of the wiring accessories unit.
Siemens financial adviser on the water unit sale is Goldman Sachs Group (GS.N), according to the sources familiar with that transaction.
Goldman Sachs declined to comment, as did AEA, Triton, KfW, ABB, LeGrand and HSBC.
Schneider, Sun Capital and American Industrial Partners were not immediately available for comment.
(Reporting by Arno Schuetze and Greg Roumeliotis; Additional reporting by Maria Sheahan; Editing by Pravin Char)