Siemens Healthineers plans to buy Varian

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The medical technology group from Erlangen wants to grow significantly in the US business – and is digging deep into its pockets. The billion dollar deal will also affect Siemens’ future stake in the MDax company.

Erlangen (dpa) – The medical technology group Siemens Healthineers wants to expand its business in the United States with a billion-dollar acquisition.

To this end, Varian, a company specializing in cancer care, is to be bought for $ 16.4 billion (€ 14 billion), the Siemens subsidiary listed in the MDax announced in Erlangen on Sunday. Varian shareholders are expected to receive $ 177.50 per share. That is about a quarter more than the shares had cost on Friday evening. The Board of Directors of the US group approved the plan and recommended that the shareholders accept the offer.

Varian had sales of approximately $ 3.2 billion in the past fiscal year, with an operating margin of 17 percent. Siemens Healthineers plans to finance the acquisition in about half through loans and the other half through new equity, which the Erlangen-based company intends to procure by issuing new shares. The acquisition of Varian is subject to the approval of
Varian shareholders, regulatory approvals and other customary closing conditions are expected to be completed in the first half of the 2021 calendar year.

Siemens AG welcomed the planned acquisition and said that the “Vision 2020+” strategy would be continued consistently. The planned increase in shareholders’ equity of Siemens Healthineers AG, in which Siemens AG will not participate, will reduce Siemens AG’s stake in Siemens Healthineers AG from 85 percent to approximately 72 percent.

Siemens Healthineers went public in 2018 and has been legally independent of Siemens AG since then. However, this still holds 85 percent of the Healthineers shares. The company employs around 50,000 people at locations in more than 70 countries.

In the second quarter of the 2019/2020 financial year, Siemens Healthineers increased sales by 3.3 percent to EUR 3.685 billion. Without the corona effect, growth would have been about four points higher, Siemens Healthineers said. The profit after tax in the second quarter of 414 million euros was still above the previous year’s value of 381 million euros.

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