Siemens to unload majority stake in Healthineers imaging business
Global technology firm Siemens AG on Wednesday announced plans to unload its majority stake in the company’s Healthineers imaging business, which is worth approximately $39 billion (USD).
The Munich, Germany-based company is doing so by transferring 30% of total shares in Siemens Healthineers over to the parent company’s stockholders. This will reduce Siemens’ stake in the Healthineers business from 67% down to 37% or less.
Siemens first spun off the Healthineers segment in 2017 and has gradually reduced its stake since. It unloaded 2% of the company in February, generating about $1.5 billion through the sale of 26.5 million shares. Siemens said the move will allow the company to become leaner, unlocking long-term value for shareholders while simplifying its portfolio, which focuses on industry, infrastructure and transportation.
“Today marks the beginning of the next stage of growth for Siemens,” Roland Busch, PhD, president and CEO of Siemens AG, said in a Nov. 12 announcement. “By giving up the controlling majority in Siemens Healthineers, we are focusing on a highly synergistic Siemens portfolio,” he added.
Reuters estimated Wednesday the stake is worth approximately 33.5 billion euro or $39.07 billion USD. The outlet noted that Siemens plans to continue reducing its holdings in the imaging giant to less than 20% in the medium term. Siemens will not collect money from the stock transfer, which it labeled as the “preferable option” to divest in the business. Distributing the shares as a dividend in kind, conversely, could result in a large tax bill, Reuters reported.
Siemens Healthineers welcomed the move, which will likely boost its share price while reducing uncertainty around the manufacturer’s future. The share spin-off is still subject to approval by shareholders of both companies and German tax authorities. Siemens AG said the decision follows a “thorough assessment and strategic review of how both companies can best realize their full potential.”
"We appreciate the clarity," Siemens Healthineers CEO Bernd Montag, PhD, said according to Reuters. "It continues our journey to becoming a fully independent company."
Siemens Healthineers also reported its quarterly earnings results on Nov. 5.
Marty Stempniak has covered healthcare since 2012, with his byline appearing in the American Hospital Association's member magazine, Modern Healthcare and McKnight's. Prior to that, he wrote about village government and local business for his hometown newspaper in Oak Park, Illinois. He won a Peter Lisagor and Gold EXCEL awards in 2017 for his coverage of the opioid epidemic.