Siemens plans an IPO of its 40-billion-dollar medical care unit
European largest industrial conglomerate Siemens plans to list its 40-billion-dollar medical care unit on the Frankfurt stock exchange. This may be the largest IPO in Germany for more than two decades. The Munich-based company on Wednesday chose Frankfurt to New York for the listing of Healthineers. The decision of the supervisory board to list there, probably in the first half of 2018, is important for Deutsche Borse, which has often been overshadowed for large IPOs from New York, London and Hong Kong.
As part of the listing, Siemens is expected to sell a minority stake of up to 25%. This will be the largest primary public offering on the stock exchange after those of Deutsche Telekom in 1996, which attracted 13 billion USD.
The listing will be the biggest move so far for Chief Executive Officer, Joe Kaeser, as he changes the structure of the company. Joe Kaeser launched the implementation of its Vision 2020 plan in 2014, according to which Siemens focuses on core industrial operations and outsources other units.
In the last quarter, Healthineers reported largest revenue among the Siemens’ nine divisions, which amounted to 2.7 billion EUR. The 19% margin made it the most profitable. The analysts estimate the market value of the company to about 40 billion USD.
The division is known for selling medical equipment to hospitals, but high margins are due to the provision of services that combine hardware and software, including advice.
Siemens has already merged its renewable energy unit with Spanish manufacturer of Gamesa wind turbines.
According to three sources familiar with the company’s plans when it was considering where to list Healthineers, London has dropped off as a proposal for Britain’s decision to leave the European Union. Siemens refuses to comment on whether London has ever been discussed as an option.
In the words of Michael Senn, board member responsible for Healthineers, the Frankfurt stock exchange is attractive to investors around the world.
Sources familiar with the decision point out that Frankfurt was preferred to New York because it is attractive to Asian investors and because the group wants to leave the German trade unions happy.