Trade Resources Industry Views Siemens May Be Saying Auf Wiedersehen to Its Healthcare Business

Siemens May Be Saying Auf Wiedersehen to Its Healthcare Business

Siemens may be saying Auf Wiedersehen to its healthcare business, but won’t be taking it public anytime soon.

The German giant announced in November that it would legally separate its healthcare business from the rest of the company. That plan is still expected to take place later in 2015, but its CEO, Josef Kaeser, told a German publication last week that $17-billion Siemens Healthcare would not be listed on the public markets next year.

The legal separation has been seen by some as a possible precursor to business version of divorce, according to a report by Reuters. Not so fast, Kaeser told the German weekly Wirtschafts Woche.

Kaeser said that Siemens wants to prepare its healthcare business to move more into molecular biology, diagnostics, and biotechnology. Independence would make it easier for Siemens Healthcare business to acquire other companies, the Reuters story said.

"I know that some analysts on the capital market see progress as being too slow," Reuters quoted Kaeser as saying to Wirtschafts Woche. "I tell them that our company is not just being set up for the next quarter or the next year but for a whole generation. The innovation cycles for our products and solutions are between three and eight years. So we can't post new records every quarter."

Siemens is mulling expansion of its healthcare manufacturing base, including x-ray equipment and other products, according to a report in The Economic Times.

Siemens Healthcare CEO Britta Fünfstücksaid the expansion would focus on the Indian market before seeking to cater to the global market, the newspaper said. The company has plants in Goa and Baroda.

Siemens announced earlier this year that it was selling its healthcare IT business to Cerner Corp. for $1.3 billion. Siemens is also selling its hearing aid business to the Swedish private equity company EQTPartners and the investor family Strüngmann for more than €2.15 billion ($2.68 billion).

Along with headwinds from the strength of the Euro, Siemens has blamed the moves on weak economic conditions in Europe, uncertainty in the healthcare market, the excise tax on medical devices in the United States, and—as with other multinationals—slowing growth in China.

Siemens is not alone in its self-splitting strategy. Dutch electronics giant Philips announced in September it would separate its healthcare and lighting businesses, with the possibility of spinning off the new lighting company with an IPO by 2016, according to an article in the Wall Street Journal.

Philips has the seventh largest medtech business in the world, with nearly $14 billion in annual sales, according to Qmed’s sister publication MD+DI..

Source: http://www.qmed.com/news/siemens-plans-spin-healthcare-biz-2015
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Siemens Plans to Spin off Healthcare Biz in 2015