|Siemens Healthcare CEO Josef Kaeser|
Siemens Healthcare will become a separate company in 2015, as previously planned. But the highly profitable company won't list on the public markets next year, the company's CEO told a German publication. Prior to this, the conglomerate was keeping its options open as to what to do with the unit, after committing this year to sell off several parts of it in deals that are slated to close early next year.
The healthcare unit is expected to become a separate company during the third or fourth quarter next year.
"Healthcare will be a company in a company; we announced that we now take it legally separate and prepare it for all potential moves," Siemens chairman, President and CEO Josef Kaeser said on its November earnings call. "We need to learn what to do at that point in time. And we want to keep control on when and how to act, and that's exactly what we are preparing for."
The separation out of the healthcare business comes on the heels of several dramatic moves in 2014 that sparked speculation as to Siemens' healthcare strategy moving forward.
Most recently in early November, the company said it would sell its hearing aid business, Siemens Audiology Solutions, to private investors including EQT and the Strüngmann family for €2.15 billion ($2.6 billion), plus an additional undisclosed amount in milestones. The deal is expected to close during the first quarter and Siemens will retain an equity position of €200 million ($245 million) in the new company. Siemens had previously planned a public listing for the business.
Prior to that in August, it said it would sell its hospital information systems for €963 million ($1.3 billion) to Cerner--the deal is scheduled to close during the first quarter as well. Finally, in July Siemens committed to selling its microbiology business to Danaher ($DHR) for an undisclosed amount. The business includes systems for the identification of and analysis of the antibiotic susceptibility of microorganisms.
All of this maneuvering is to enable Siemens Healthcare to focus on its core in-vitro business within diagnostics--a goal the conglomerate outlived in its long-term planning through 2020, which Kaeser outlined in May. At that time, Siemens said it wants to focus on diagnostics that major trends such as big data analytics, molecular diagnostics, as well as point of care and mobile healthcare.
During its fiscal fourth quarter, Siemens had €1.037 billion in diagnostics revenue, which was an increase of 1% from the same period a year earlier. It reported profits of €110 million in the diagnostics business in that quarter, up from €82 million a year earlier.
- here is the Reuters story