Siemens Plans Health IPO Valuing Unit at $38 Billion
Siemens will press ahead with an IPO of its health-care unit, price range between 26 euros and 31 euros a share.
(Bloomberg) -- Siemens AG will press ahead with an initial public offering of its health-care unit that could value it between 26 billion euros ($32 billion) and 31 billion euros as Chief Executive Officer Joe Kaeser unloads another key business at Europe’s largest engineering company.
The IPO of a 15 percent stake in Siemens Healthineers is planned for March 16, the Munich-based company said in a statement on Sunday. Siemens expects to generate 3.9 billion euros to 4.65 billion euros from the offering. The shares will be priced in a range of 26 euros and 31 euros each.
Earlier estimates for the IPO, potentially the largest in Europe this year, had put a value on the company of as much as 40 billion euros.
The value slipped after initial investor feedback, people familiar with the matter said last week. The offering comes amid market volatility that temporarily dampened investor appetite. A bet by Siemens Healthineers on the success of its Atellica portfolio of lab equipment and products is also weighing on the sale. Launched in 2017, it’s being billed as the flagship line for the business given the slow but steady growth in scanners.
Market Volatility
“Despite the resilient business characteristics it appears that the recent stock market volatility has had a more pronounced impact on the valuation of Siemens Healthineers than we had previously expected,” Baader Helvea analyst Guenther Hollfelder said in a note Monday.
Morgan Stanley analyst Ben Uglow sees the valuation as in-line with estimates, but noted the recent share sell-off was “an unusual situation, bordering on the extreme.”
Shares of Siemens declined 0.2 percent at 102.78 euros at 9:11 a.m. in Frankfurt, valuing the company at about 87 billion euros. The shares have dropped 12 percent this year.
The IPO is part of a broad overhaul of Siemens by Kaeser, who also merged the wind power unit with Spanish competitor Gamesa SA in 2017, and is combining the company’s train business with that of Alstom SA, and selling the Flender GmbH mechanical drives operation, according to people familiar with the matter. Kaeser has likened the moves as shifting the company from being an aircraft carrier to a nimble fleet of ships.
Siemens announced in November 2016 that it planned an IPO of a minority stake in the unit, which also sells scanners, X-ray machines and other diagnostic equipment. Healthineers posted profit of 2.49 billion euros on revenue of 13.8 billion euros for the year ended Sept. 30, according to a November statement from the parent company.
--With assistance from Hanna Hoikkala
To contact the reporter on this story: Oliver Sachgau in Munich at osachgau@bloomberg.net.
To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, Andrew Noël, Tara Patel
©2018 Bloomberg L.P.