Mumbai, Aug 27 (IANS): Siemens Ltd. has said its Board of Directors have approved the sale and transfer of its mechanical drives (MD) business for Rs 440 crore to Flender Drives Private Ltd.

Flender Drives Private Limited is a subsidiary of Flender GmbH, which in turn is a subsidiary of Siemens AG, the promoter of Siemens Ltd.

The sale and transfer of MD business is a growing concern and on a slump sale basis, with effect from January 1, 2021. The same is subject to receipt of requisite statutory and regulatory approvals as applicable.

"The Board of Directors of Siemens Limited have approved the sale and transfer of its Mechanical Drives (MD) business for Rs 4,400 million (four thousand four hundred million indian rupees) to Flender Drives Private Limited, subject to adjustment for the change in net current assets and capital expenditure subsequent to June 30, 2020 up to the date of actual transfer of the MD business," it said.

The consideration has been arrived at on the basis of an independent valuation recommended by the Committee of Directors and the Audit committee, Siemens Ltd added in a statement.

Sunil Mathur, Managing Director and Chief Executive Officer, Siemens Limited, said, "Potential growth in this business will require substantial Capex and moreover, there are no synergies with the existing businesses of Siemens Limited. Keeping the interests of the shareholders in mind, the Board of Siemens Limited has approved the sale of this business to Siemens AG which has announced their intention to publicly list this business via a spin-off."