Siemens: The Focused Federation—Turning Spin-offs into a Repeatable Art

How Can a Company Get "Stronger the More It Splits"?

After reading about GE, you may have come away with a sad impression of "spin-offs": that they are amputations to survive after an empire's collapse, the bitter medicine forced down after twenty lost years.

But Siemens offers the exact opposite version. This German industrial giant, founded in 1847, has over the past two-plus decades proactively and continuously spun off its businesses, one after another—and with every piece it shed, it didn't bleed out; it grew more focused and more valuable. Both did the "splitting," but GE was like a forced amputation, while Siemens was like a gardener pruning branches: cutting back the side shoots so the trunk can grow taller.

Where exactly is the difference? The answer is hidden in two words: "timing" and "cadence."

Twenty-five Years, Spinning Off a Whole Fleet

Lay out Siemens's spin-off history and you see a clear, patient trajectory—not one big bang, but a series of carefully arranged acts of "letting go":

Note: market caps are approximate, in US dollars, as of June 2026, and will move with share prices. Siemens Energy briefly fell into crisis in 2023 (massive losses at its wind subsidiary Gamesa) before recovering sharply.

The numbers speak for themselves: businesses that were once just "a single division" within the Siemens group grew, one by one, into giants after going independent—the combined market value of the three spun-off companies alone is about US$353.5 billion, exceeding the focused parent Siemens AG (~US$239.8B). Add the parent and the three together, and this "fleet" carries a total market value of about US$593 billion—far beyond the valuation any single "carries-everything" conglomerate could ever achieve.

With every spin-off, Siemens was not panic-selling in a crisis but letting go calmly while the business was still healthy, still able to fetch a good price, and still able to win a good market multiple. That composure is precisely what most fundamentally separates it from GE.

Joe Kaeser's "Fleet of Ships" Philosophy

Behind this run of serial spin-offs lies a clear vision. Joe Kaeser, who steered the company from 2013 to 2021, put forward a famous metaphor: rather than be one lumbering aircraft carrier that loads everything onto a single hull, turn Siemens into a "fleet of ships"—a group of independent vessels, each nimble, each focused, each able to change course quickly.

During his tenure, Siemens was reshaped from an all-encompassing industrial conglomerate into a structure of "three independent companies + one focused parent": Siemens Energy was spun off, Siemens Healthineers was independently listed, and the "new Siemens AG" focused on industrial automation, smart infrastructure and industrial software. A bloated empire was deliberately reorganized into an agile fleet.

Why Germany Splits So Calmly—Discipline Built by Institutions

Siemens's ability to spin off "continuously, proactively, and without bloodshed" for more than two decades is not just the wisdom of one CEO—it also rests on the unique institutional soil of the German AG (Aktiengesellschaft, a stock corporation). It differs most fundamentally from the United States and Taiwan in three ways:

Why Does "Continuous, Proactive, Gradual" Beat "a One-time Crisis Break-up"?

Both broke up sprawling conglomerates, so why was Siemens's path so much smarter than GE's? Three things are key:

(1) Timing: let go at the top, not fire-sell at the bottom. Siemens always spun off a business while it was still healthy and in market favor, securing a good valuation and a strong independent starting point. GE, by contrast, dragged on until GE Capital detonated and its market value collapsed by 90%, before being forced to break up—with far worse optics and far weaker bargaining chips.

(2) Cadence: spread the risk, recalibrate continuously. By breaking the spin-offs into a series of small steps over more than twenty years, rather than one big gamble, Siemens could observe, learn and adjust at every step. It's like periodically rebalancing a portfolio, rather than waiting to liquidate everything in a blow-up.

(3) Discipline: make "splitting" a system, not an emotion. For most CEOs, "tearing apart the business you built with your own hands" is an emotionally near-impossible hurdle. Siemens turned it into a calm, repeatable capital-allocation routine—and that is the biggest dividing line between top allocators and empire builders.

The best owner test: Siemens isn't the best owner of semiconductors, but it is of industrial software

Splitting and Merging in Tandem: Spin Off Energy While Buying Software

Here is the lesson from Siemens most worth learning, and the fullest embodiment of this whole series' "Merge & Split" theme—it doesn't only know how to "split"; it is "merging" at the same time.

Even as it spun off energy and medical one by one, Siemens was aggressively "merging" in another direction: it acquired EDA software firm Mentor Graphics (2017, ~US$4.5 billion), and in 2024 announced it would acquire simulation and AI-computing software company Altair for about US$10 billion, aiming to build "the most complete AI industrial-software portfolio."

Splitting one moment and buying the next looks contradictory, but it is in fact two sides of the same logic: let go of the businesses where "I'm not the best owner" (split energy, semiconductors, lighting), and buy in the capabilities where "I am the best owner" (merge in industrial software, automation). Both the splitting and the merging serve one goal—making Siemens more irreplaceable on the battlefield where it most deserves to win (industrial digitalization).

GE vs Siemens: Two Ways to Dismantle an Empire

Both arrive at "more focused" as the endpoint, but Siemens's road skipped GE's twenty lost years. The difference isn't whether to split, but whether you split proactively and calmly at the top—or passively and clumsily at the bottom.

Lessons for Taiwan: Make Spin-offs a Discipline, Not Emergency Surgery

Up next: Germany's Other Cut of the Century

Siemens is the art of "continuous, gradual" spin-offs. In the next piece, we look at another German industrial giant—the century-old automotive champion Daimler—and how it used one clean "split into two" to separate the Mercedes passenger-car and truck businesses, letting each wheel accelerate on its own.

From a fleet, to a clean cut in two. See you in the next piece, Daimler.

Post-Spin-off Scorecard: Siemens's Serial Spin-offs

Using the six questions from the Introduction, here is the overall verdict on this run of serial spin-offs:

Overall verdict: spin-offs made into a repeatable discipline—stronger with every split; the only "△" is that partial stakes are still retained, so valuation release is gradual rather than delivered all at once.