Siemens and International Investors
Naerger, Heribald, American Banker
Siemens and International Investors
Siemens AG, with sales of DM 54.6 billion in fiscal 1984/85 number one in Germany's electrical and electronics industry, is today one of the most widely held German corporations, having over 400,000 shareholders worldwide. 51,000 of them live in other countries. In October of 1982--the date of the most recent survey--these 51,000 shareholders owned roughly 30% of the company's capital stock. Comprising 130 different countries in all, the list enumerating the countries of residence reads like a membership directory of the United Nations. However, there is a distinct emphasis on Western Europe and, more especially, on those neighboring countries on whose stock exchanges the Siemens share has long been listed: 38,000 shareholders in Austria, Belgium, France, Holland, and Switzerland account for roughly 15% of the capital stock, with the largest number of non-German shareholders (23,000) living in France alone.
This has not always been so. In fact, only twelve years earlier, in 1970, the company had but 285,000 shareholders, and 27,000 of them, holding a good 18% of the capital stock, lived abroad. Earlier still, in the '50s, non-resident ownership must have been negligible and, when the era before World Wars I and II is taken into account as well, the Siemens share can indeed be described as a "traditionally German stock'--not so much as a result perhaps of Management's own free will but rather due to the force of circumstances.
The company, established 138 years ago in Berlin by Werner von Siemens, who later discovered the dynamo-electric principle, and Georg Halske as a general partnership, was incorporated as an Aktiengesellschaft in 1897. Two years later, in 1899, the Siemens share was first listed on the Berlin Stock Exchange. The fact that Germany was a reasonably wealthy country prior to World War I combined with the inadequacies of international capital movements to make ownership of Siemens & Halske AG an essentially self-contained Germany affair, although the company's sales and engineering activities were international enough even then.
Only a few years after World War I, a capital-thirsty and inflation-impoverished Germany began to look to the capital resources of other countries--plagued simultaneously, however, by the fear of "Uberfremdung', the fear of being controlled from outside. In the process, Siemens in 1925 and 1926 floated on the U.S. market two participating debentures with divident-linked interest rates--early forerunners of today's Swiss "Partizipationsscheine' (participation certificates). To emphasize even more clearly the nature of such debentures as non-voting almost-ownership titles, birth was later given to one of the curiosities in the history of capital markets: In 1930, Siemens & Halske AG floated 30 million dollars worth of participating, i.e. divident-linked, debentures with a maturity of one thousand (1) years. They would be repayable in the year 2,930--had they not all been repurchased in the market in the later '30s.
World War II ended with the total collapse of the German economy in 1945. Life did not really recommence until the 1948 currency reform creating the Deutschmark as the new (West) German currency unit. Faster than expected, the German economy began to rise from the ashes. Outside observers spoke of the German "economic miracle', which was accompanid by a seemingly endless upswing on the German stock market. In 1957 and 1959, two U.S. banks felt that Amerian investors should be given the chance of "having a piece of the action.' They created, and Siemens did not contradict, American Depositary Receipts (ADRs) representing Siemens & Halske's bearer shares. …