Siemens Is Delaying Signing $20 Billion Saudi Power Deal
(Bloomberg) -- Siemens AG Chief Executive Officer Joe Kaeser’s decision to skip an investment conference in Saudi Arabia this week has delayed the signing of a power-plant contract that could ultimately be worth as much as $20 billion, according to people familiar with the matter.
Kaeser was scheduled to sign the agreement while attending the Future Investment Initiative conference in Saudi Arabia this week, said the people, who asked not to be identified because the talks aren’t public. The project is expected to go ahead despite the snub, although at a later date, they said.
The prospective deal sheds light on the hard choices facing global companies trying to capture business in countries with poor human-rights records. Kaeser was one of the last high-profile CEOs to pull out of FII, which was meant to highlight Saudi Crown Prince Mohammed bin Salman’s efforts to diversify the Gulf kingdom’s economy. Participation at the event, which started Tuesday in Riyadh, has become a litmus test for corporate chieftains following the killing of journalist Jamal Khashoggi.
Saudi Arabia showcased international deals worth about $50 billion at the forum, as tries to put the best possible gloss on a flagship summit tainted by international outrage over the killing of Khashoggi, a critic of the government who disappeared on Oct. 2 after entering the Saudi consulate in Istanbul.
After earlier denials, Saudi Arabia admitted last week that Khashoggi had been killed, but claimed that his death was accidental and the operation involving more than a dozen people close to the crown prince wasn’t authorized by him. Turkish President Recep Tayyip Erdogan on Tuesday rejected Riyadh’s account.
“Truth needs to be found out and justice applied,” Kaeser said in a tweet on Monday, after days of suspense over whether he would attend the meeting. “It’s not a decision against the Kingdom or its people.”
A Siemens spokesman declined to comment. Saudi Arabia’s energy ministry couldn’t immediately be reached for comment.
Siemens could use the business. Its struggling turbine unit is suffering from a sharp slump in orders triggered by a global shift to renewable energy sources. Kaeser is cutting thousands of jobs at the German firm as a result, while rival General Electric Co. is in the throes of a deep revamp. Separately, the companies are dueling over a major order in Iraq that’s drawn intervention by their respective governments.
Siemens shares slipped 0.7 percent to 99.58 euros at 3:23 p.m. in Frankfurt. The stock is down 14 percent this year.
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