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Author: Jean-Claude Muller, 穆卓Executive Editor at BtoBioInnovation  jcm9144@gmail.com

SPECIAL REPORT #20.23

Siemens acquires Varian for $16.4 billion

Siemens Healthineers AG acquires Varian Medical Systems Inc, a US company headquartered in Palo Alto (California) active in the area of cancer care, offering innovative solutions primarily in radiation therapy and related software therapy, for $16.4 billion.  The deal is the first major growth move by Healthineers since it was spun off and floated in 2018 by Siemens AG, which is undertaking a large shakeup of its conglomerate structure to create room for its various business units to do their own deals.

“The acquisition of Varian will create a world-leading company in the area of cancer therapy – a company in which Siemens AG will participate as a strong and long-term majority shareholder.” “Siemens Healthineers is excellently positioned in an attractive growth market in the global battle against cancer.” said Roland Busch, Deputy CEO of Siemens AG. “A transformational step of this kind would not have been possible in the conglomerate structure of the old Siemens AG” said Joe Kaeser, President and CEO of Siemens AG.

Under the agreed transaction, Healthineers will acquire all shares in Varian for $177.50 each in cash, representing a 24% premium to Varian’s closing price on July 31 and 42% above its 30-day weighted average. In  fiscal year 2019, Varian, the current leader in radiation therapy with a market share of over 50%, generated revenues of $3.2 billion with an adjusted operating margin of approximately 17%. Several analysts consider that Healthineers overpaid for Varian. Healthineers CEO Bernd Montag rejected the suggestion “This is an icon in our industry. If you put it into perspective we achieved a sensible price” he told reporters. The transaction underscores the financial strength of the Siemens Group and will be financed by a combination of equity and debt financing. Siemens AG will not participate in the planned equity increase at Siemens Healthineers AG.

La Baule, August 3, 2020

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