Siemens Healthineers Raises $2.8 Billion to Fund Varian Purchase

Siemens Healthineers AG raised 2.34 billion euros ($2.8 billion) selling new shares to help finance its purchase of Varian Medical Systems and chart a path toward joining Germany’s bluechip DAX Index.

The company issued 53 million shares at 44.10 euros each, offering them exclusively to institutional investors via an accelerated bookbuilding process, it said in a statement Wednesday. Siemens Healthineers got enough orders to cover the private placement, with approximately 16% of the offer going to Qatar Investment Authority.

Siemens Healthineers agreed to buy Varian for about $16.4 billion in cash last year, giving it a sizable market share in the rapidly growing field of cancer treatment. The deal was financed by a 15.2 billion-euro bridge loan from parent Siemens AG. The company plans to use the funds from its share sale to replace part of that facility.

Siemens Healthineers’ possible DAX inclusion has been a burning question for investors and analysts since the company was brought to market three years ago. Because of Siemens Healthineers’ small free-share float -- Siemens holds about 79% of the stock -- it has been left out of the coveted index despite an almost 50 billion-euro market capitalization. Joining the DAX is a clear goal of Chief Executive Officer Bernd Montag, and selling new shares may bolster the German company’s case for being selected for the index.

With Palo Alto, California-based Varian, Siemens Healthineers is gaining access to devices and software used to treat cancer. Recent developments in radiation therapy, coupled with more precise imaging, have been linked to lower death rates, a trend the maker of MRI machines and laboratory equipment is keen to capitalize on.

Siemens Healthineers shares closed at 46.38 euros on Wednesday. The firm doesn’t plan additional share sales to finance the Varian deal, it said.

JPMorgan Chase & Co. and UBS Group AG are joint global coordinators. Berenberg, Credit Suisse Group AG, Deutsche Bank AG and UniCredit SpA are joint bookrunners. Bank of America Corp., BNP Paribas SA and HSBC Holdings Plc are co-bookrunners.

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