Siemens and Cerner team to develop new med tech as part of $1.3B deal

Siemens and Cerner are teaming up to develop medical devices, imaging and healthcare technology as part of Cerner's $1.3 billion acquisition of Siemens' health information technology business.

Cerner CEO Neal Patterson

Under the agreement, the companies will form a three-year "strategic alliance" to bring new products to market and improve clinical outcomes, Bloomberg reports. Siemens and Cerner will each contribute as much as $50 million to the new initiative and focus on projects of shared interest. The deal is expected to add more than 15 cents to earnings per share in 2015, giving the combined companies annual sales of $4.5 billion in 2014--roughly $1.6 billion more than in 2013. The acquisition is expected to close in the first quarter of 2015, Cerner said in a statement.

"Medical technologies generate mountains of images and other data that must be stored, accessed, visualized and interpreted intelligently," Cerner CEO Neal Patterson said in a statement. "In addition, advanced diagnostic and therapeutic processes are enhanced by presenting [electronic medical record] data at just the right moment and in the right context. Together we will innovate at the edge where IT, processes and technologies meet."

The deal falls in line with Siemens' plans for massive corporate restructuring, as the company attempts to pare down business and prioritize well-performing units. In May, the German conglomerate said it was preparing a public offering of its audiology unit, a business with the potential to become the third largest hearing aid company in the world. Last month, Siemens sold its clinical microbiology unit to Danaher ($DHR) for an undisclosed price.

But dividing and conquering is not the company's only plan of action. Siemens also hopes to beef up its presence in companion diagnostics with a string of heavyweight deals. In June 2013, the company said it would team up with pharmaceutical giant Johnson & Johnson ($JNJ) to create a lab test for an early-stage compound from J&J's Janssen unit. In December, Siemens inked a deal to develop companion tests for some of Pfizer's ($PFE) drugs, strengthening its foothold in personalized medicine and in vitro diagnostics.

- read the Bloomberg story
- here's Cerner's statement
- and here's Siemens' statement

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