Wärtsilä spinning out its energy storage activities and divesting a 50% stake this week reflects difficulties in making the business profitable and synergistic within the wider group activities, analysts said.
The Finland headquartered power solutions and system integration firm this week announced the a JV with German firm RCT Solutions into which its energy storage activities and assets will be rolled. It will now focus on its broader energy solutions and marine power solutions businesses, which are its longer-standing, core and more profitable activities.
Ownership of the JV will be split 50:50 between the two companies, making this effectively a 50% divestment by Wärtsilä, which is headquartered in Finland.
RCT Solutions CEO Peter Fath will head up the JV entity, taking over from Tamara de Gruyter, who led it since the company parted ways with industry veteran Andy Tang in 2025 (Tang then joined Chinese lithium-ion OEM Rept Battero).
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‘Hard to make business profitable’, ‘limited synergies’
Timo Heinonen, an equity analyst covering the company at Handelsbanken, told us that ultimately the company had to get storage out of its profit and loss reporting because of the dilutive effect it was having on group margins.
And while the deal may seem odd or less favourable for the company, from a wider group perspective it made sense.
“They tried to divest it conventionally but failed,” he said, alluding to the strategic review launched in 2023 but ended in early 2025. “Demand is pretty weak at the moment. It used to be a US-dominated business, but with everything happening, they had to find new markets, but those markets are crowded and price pressure is intense.”
“It’s primarily a software business, so they have to invest in R&D all the time to stay with the competition. But it’s hard to make the business profitable, so it’s diluting the group profitability.”
This matches up with what another analyst, Danske Bank’s Panu Laitinmäki, told us at the time Wärtsilä began the strategic review.
Heinonen also says that the benefits of being part of a larger power solutions group have not been borne out, further reducing the rationale of keeping the division.
“The synergies between storage and gas engines are quite limited. They talked a few years ago about the cross-selling opportunities between gas turbines and BESS, but these have been very limited. That story has not evolved as the management expected,” he said.
Louis Billon, also an equity analyst covering the company for equity research house Alpha Value, said: “It was expected, because it’s not Wärtsilä’s core business, the synergies with other businesses were not very significant. The competition is tough and Wärtsilä has been severely hit by tariffs.”
“In short, I think its a good news because In my view the strategic review 1-2 years ago was an attempt to sell the unit but it has been unsuccessful. Now it is a kind of success. (At least from a reporting point of view). The way they will report is creative, hence I expect bad news on the performance of this business.”
“The impact on valuation is limited because the valuation is mainly driven by the AI capex and the energy storage division was quite small.”
These points were largely reflected in an analyst call that the Wärtsilä executive team gave on the day of the announcement.
How much value is there in the business?
The company’s share price actually fell on the news of the deal, which Heinonen said may reflect a belief in the market that there is still more divestment value to be gleaned from the business. Demand for energy storage is only expected to grow.
The fact that the company has not guided for any one-off financial benefits from offloading the 50% stake indicates it has received either no money for it, or a negligible amount. RCT is not putting in any physical or IP assets, either.
Wärtsilä management were asked during the call with equity analysts how exactly the deal was structured to end up at a 50:50 JV equity split.
“I assume some valuation of assets should have happened. Will you be able to disclose what were your internal valuation of your energy storage business for this transaction, and maybe how did you value the contribution of RCT? Is it just the knowledge they are bringing? Because if it is the case, then this knowledge is worth at least a few hundred million euros, that’s the question,” the analyst said.
However, Håkan Agnevall, Wärtsilä president & CEO, said it would not be going into any of those details, reiterating that RCT was bringing competence, execution capabilities and opportunities for vertical integration.
The company has said that the JV will initially be loss-making and cause a €40-€50 million (US$46-58 million) hit to its 2026 full-year operating result.
Arjen Berends, executive VP and CFO, possibly alluded to one reason for going restructuring it into a JV until it finds an outright buyer: “After first of January 2027, it will not be part of operating result because IFRS 18 will change the structure of the P&L, so it will be results from investing activities instead.”
Håkan also spoke to the lack of synergies between gas turbines and battery storage when asked if the company was missing out on an opportunity to provide a holistic solution to the growing data centre market: “Those have never been contracted in one go, so it’s all separate contracts and negotiations.”
The company is in discussions with several different parties for further investment into the JV, which may dilute down both Wärtsilä and RCT’s stakes, Agnevall added.
