Siemens buys back €1.9 billion of convertibles in tender

By Susanna Moon

Chicago, Aug. 17 - Siemens AG said it repurchased €1.9 billion of convertible notes due June 4, 2010, or 76.6% of the outstanding notes.

The company said it paid roughly €3.3 billion in cash for the notes.

Notes not repurchased were "almost entirely" converted into stock, resulting in the issuance of 10 million new shares. The remaining notes will be redeemed after Aug. 17, according to a press release.

On June 4, 2003, Siemens sold €2.5 billion of the seven-year convertibles at par to yield 1.375% with a 46% initial conversion premium.

The conversion price was set at €56.168.

"With this transaction, we have substantially reduced the dilutive effect on our earnings per share from exercising the conversion rights," Joe Kaeser, chief financial officer of Siemens AG, said in the release.

Siemens is an electrical engineering and electronics conglomerate based in Munich.

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