BERLIN (Reuters) – German well being group Siemens Healthineers (SHLG.DE) mentioned on Sunday it might acquire Varian Medical Systems Inc (VAR.N) in a deal that values the U.S. maker of units and software program for most cancers remedies at $16.4 billion.
FILE PHOTO: A staffer works on a magnetic resonance imaging machine at a manufacturing line of Siemens Healthineers in Shenzhen, China May 25, 2018. REUTERS/Bobby Yip
Under the agreed transaction, Siemens Healthineers will acquire all shares in Varian for $177.50 every in money, representing a 24% premium to the U.S. firm’s closing worth on Friday.
Industrial conglomerate Siemens (SIEGn.DE), which spun off Healthineers in 2018 however retains a controlling stake, will present bridge financing for the deal, which seeks to create a worldwide chief in most cancers care options by 2025.
“With this combination of two leading companies we make two leaps in one step: A leap in the fight against cancer and a leap in our overall impact on healthcare,” mentioned Bernd Montag, CEO of Siemens Healthineers.
Varian President and Chief Executive Officer Dow Wilson mentioned: “With Siemens Healthineers, we will transform care for a greater number of patients worldwide, as well as broaden opportunities for our employees as part of a larger and more global organization.”
The deal, first reported by Bloomberg, is topic to approval by Varian shareholders and regulators. It is anticipated to shut within the first half of 2021 and be accretive to Siemens Healthineers’ adjusted primary earnings per share inside 12 months of that.
BALANCE SHEET SUPPORT
Siemens is successfully placing its stability sheet to work to fund the deal, offering a bridging mortgage of 15.2 billion euros ($17.9 billion) to Healthineers.
The medical expertise unit goals to substitute 50% of that by way of a rights problem this yr, topic to market situations.
Siemens mentioned in a separate assertion that it expressly welcomed the deal and would increase the cash for the bridging mortgage by issuing bonds. As a consequence, its stake in Healthineers can be diluted to about 72% from 85%.
Separately, Healthineers fiscal third quarter outcomes, pre-released as a substitute of Monday due to the acquisition announcement, confirmed income declined 6.9% year-on-year on a comparable foundation to 3.3 billion euros, due to the impression of the coronavirus pandemic.
Its adjusted working margin was 13.9%, down 1.2 proportion factors from the identical interval a yr earlier, whereas adjusted primary earnings per share fell 21% to 30 euro cents.
Revenue is forecast to be flat in fiscal 2020 whereas adjusted primary earnings per share are seen at between 1.54 and 1.62 euros, in contrast to 1.70 euros final yr, assuming the enterprise setting doesn’t deteriorate additional. ($1 = 0.8493 euros)
Additional reporting by Joern Poltz; Editing by Gareth Jones and Susan Fenton