Siemens Healthcare Unit Won't Be Floated In 2015

By Jof Enriquez,
Follow me on Twitter @jofenriq

Siemens will not float its healthcare business next year after the unit is legally separated from the company's core industrial and engineering business. The healthcare business is expected to be separated into an independent unit during the third quarter of 2015.

When asked in an interview by the German weekly publication Wirtschafts Woche if its healthcare unit will be listed on the stock exchange in 2015, Joe Kaeser, the CEO of Siemens, reportedly answered "no," according to a Reuters report.

Kaeser was quoted as saying that Siemens' health unit will focus on molecular biology, diagnostics, and biotechnology, according to Reuters.

After legal separation, the healthcare unit will have free rein to make acquisitions and grow the business, per Reuters. Kaeser reportedly said that he expects Siemens to grow in 2016 after its industrial business returns to profitability in the present financial year through September. He advised investors and analysts to be patient given Siemens' unique pattern of growth.

"I know that some analysts on the capital market see progress as being too slow," Kaeser said, according to Reuters. "I tell them that our company is not just being set up for the next quarter or the next year but for a whole generation. The innovation cycles for our products and solutions are between three and eight years. So we can't post new records every quarter."

As reported in a previous Med Device Online (MDO) article, Siemens has opted to retain majority ownership in its healthcare division and keep the majority of the unit’s employees, even if the unit gets listed on the stock market in the future. It had earlier considered creating new healthcare units in different countries under the new healthcare division.

Despite holding on to its healthcare business, however, Siemens in recent months has divested what it perceived as non-core assets, according to the MDO article. For example, it recently sold its audiology unit to private-equity firm EQT Partners and Santo Holding for €2.15 billion ($2.68 billion). It also sold its hospital information technology business to Cerner Corp. for $1.3 billion.