Germany's Siemens has announced the spin-off of its medical division, Healthineers, which is listed on the Frankfurt Stock Exchange. The company plans to sell up to 15% of its shares, or around 150 million shares, at a price between 26 and 31 euros per share, raising between 3.9 billion and 4.65 billion euros (approximately $4.8 billion to $5.7 billion).
This valuation places the company at a maximum of 31 billion euros (around $38.2 billion), slightly below the expected 35 billion euros ($43.1 billion). However, it still stands as one of the largest initial public offerings (IPOs) in recent German history. The new shares were available for purchase from March 6 to 15, with the official listing taking place on March 16.
Originally known as Siemens Healthcare, the company rebranded to Siemens Healthineers in 2016 and now employs 45,000 people across the globe. In fiscal year 2017 (October 2016 to September 2017), the company reported total revenue of 13.8 billion euros, with a net profit of 2.49 billion euros—accounting for 40% of Siemens' overall net profit. Notably, more than half of the revenue growth during that period came from China, where sales increased by 254 million euros.
Revenue primarily comes from the medical imaging segment, which accounts for nearly two-thirds of total income and holds a leading global position. The division has seen record revenue growth and enjoys strong gross margins. Additionally, 11% of revenue comes from Advanced Therapies, which focuses on minimally invasive surgery. However, the performance of these key departments has been affected by the underperforming medical diagnostics division, resulting in a 3.8% revenue growth over the past three years. This lags behind the global economic growth rate of 2.7% in 2017, indicating some challenges in the business.
To improve performance, Siemens had previously pursued mergers and acquisitions. In October 2016, Healthineers partnered with IBM to integrate Watson AI into its medical services. It also acquired Medicalis, a medical services company, and launched Atellica, a laboratory equipment brand in 2017, aiming to challenge industry giants like Roche and Abbott Laboratories. While the company has high expectations for Atellica, it is also working on restructuring the diagnostic division, aiming to push revenue growth to 4% to 6%.
The decision to go public is not a sign of doubt in the healthcare sector, but rather a strategic move to generate cash and strengthen future acquisition capabilities. By listing Healthineers, Siemens aims to enhance its financial flexibility and expand its presence in the global medical market.
Cixi Xinke Electronic Technology Co., Ltd. , https://www.cxxinke.com