MUNICH (Reuters) – Siemens (SIEGn.DE) is buying Iberdrola’s (IBE.MC) stake in Siemens Gamesa renewable energy (SGREN.MC), the German engineering company said, as it prepares to merge the business with its own energy unit ahead of a floatation later this year.

Siemens on Tuesday approved the purchase of the Spanish utility’s 8.1% stake in SGRE, at a price of 20 euros ($22.08) per share.

Siemens will pay 1.1 billion euros and will transfer the shares to its future Siemens Energy unit, combining it with its gas and power business, the Munich company said.

“Siemens Gamesa is a vital cornerstone in the new Siemens Energy portfolio in order to shape the necessary energy transition from conventional to renewable energy,” said Siemens Chief Executive Joe Kaeser.

Siemens has recently come under fire from environmentalists after it agreed to honour a contract to supply signalling equipment to a massive coal mine project in Australia.

Kaeser said Siemens Gamesa has “considerable potential to grow and create significant value,” although the wind turbines business has struggled recently.

On Tuesday, it reported a net loss of 174 million euros (147.6 million pounds) in the three months to December, down from an 18 million euro net profit in the same period a year earlier, blaming project delays caused by the early onset of wintry weather in northern Europe.

Last week, the company formed in 2017 by a merger between Spain’s Gamesa and the wind business of Germany’s Siemens, cut its profitability target for the financial year 2020 for a second time in three months.

Following the acquisition of the shares Siemens Energy will hold about 67% of the voting rights at Siemens Gamesa giving it a two-thirds majority at the company’s annual general meeting. No mandatory takeover offer to SGRE’s external shareholders is planned, Siemens said.