2014 will be an incisive year in the over 150 year old history of Siemens. As speculated after CEO Joe Kaeser’s strategy presentation in May, the company announced today that it would spin off the healthcare business as a separate legal unit.
Siemens announced today in a press release that it would spin off the healthcare business as a separate legal unit and sell the audiology unit. “As a separately managed business , healthcare will be better able to respond more efficiently to trends and to the expected paradigm shifts in the industry,” said Kaeser. Siemens hopes that, as a separate entity, the 14 billion healthcare unit will find it easier to make the necessary investments to boost its competitiveness. Kaeser said in May that there is a technology shift to molecular diagnostics that requires investment.
On the same day, Siemens confirmed that it would sell its Hearing Aid Business to the Swedish private equity company EQT Partners and the investor family Strüngmann for €2.15b plus an earn-out component.
Siemens will, however, not entirely dispose of the business, but will remain invested with equity of €200 m and will retain a seat on the board of the new entity. “In the past years Siemens Healthcare has invested significantly in its audiology business. Both EQT with the Wallenberg family as anchor investor and the Strüngmann family have outstanding reputations and extensive experience in the healthcare sector,” said Hermann Requardt, CEO of Siemens Healthcare and member of the Managing Board of Siemens AG. The audiology business reported revenues of € 693m for 2014.
After the sale of the hospital IT business for €963m to the Amercian Cerner and the microbiology business to Beckman Coulter for € 330m, audiology is already the third bigger unit Siemens has sold off this year.
Overall, Siemens Healthcare reported a solid fiscal year 2014 with fourth-quarter profit in of € 611 m compared to € 601 in 2013. According to Siemens, profit at the Diagnostics business rose to €110 million from €82 million compared to 2013 whereas earnings in imaging and therapy systems declined.
Posted in Medical Device Business by Thomas Klein on November 6, 2014