Ahead of the upcoming separation of two of Medtronic’s business units into a standalone company, some of the medtech giant’s peers are reportedly considering adding the sloughed-off segments to their own portfolios.
In addition to the standard pool of private equity buyers, Siemens Healthineers and GE Healthcare are also mulling over a potential acquisition of Medtronic’s patient monitoring and respiratory interventions businesses, Bloomberg reports, citing several unnamed sources familiar with the matter.
The sources said that while Medtronic is moving forward with the spinout plan, it remains open to selling off the two units instead—“at the right price,” per Bloomberg. Together, they could be valued at more than $7 billion, the sources said.
None of the three companies have commented on the speculation or potential sale.
The report didn’t seem to sit well with Siemens’ investors. The response to GE Healthcare’s potential involvement was unclear, since it’s still a part of the larger General Electric family—albeit only for a few more weeks, when it’ll finalize a spinout of its own.
After Bloomberg published its story on Thursday morning, Siemens’ stock quickly began to sink. It opened at $26.12, down more than 4% from its closing price the previous afternoon. As the day went on, that downward trajectory only deepened, and the shares closed at $25.71, marking a total drop of nearly 6% for the day.
Medtronic’s own stock slump was less dramatic: It opened on Thursday morning at $77.68, only about 1.4% lower than its closing price on Wednesday, and the share price ended the day a few cents higher than it had begun.
Medtronic laid out the plans to spin off its patient monitoring and respiratory interventions businesses into a combined company in late October.
Both of the segments are currently housed under Medtronic’s medical surgical division. The first includes pulse oximeters, brain and bloodflow monitors and remote health-tracking software, while the other comprises ventilators and ventilation management software, tracheostomy and laryngoscopy supplies and other breathing support devices.
Together, the businesses brought in around $2.2 billion in global revenues for Medtronic’s fiscal year 2022, which ended April 29. The parent company said it was aiming to complete the spinoff within 12 to 18 months.
And those two aren’t the only segments currently on the chopping block. Earlier this year, Medtronic announced that it would separate out its entire renal care solutions business to form a new kidney care company. The resulting entity will be jointly owned by Medtronic and dialysis giant DaVita, with an aim of developing the next generation of kidney disease treatment technologies. That spinout was slated to be completed within a year of the May announcement.