Under the terms of the deal announced on Sunday, Siemens Healthineers will acquire all of Varian’s shares for $ 177.50 per share in cash, which is a 24% premium over Varian’s closing share price on Friday. The deal, which will be debt and equity financed, is expected to close in the first half of next year.
Siemens Healthineers said the purchase would have a positive effect on earnings per share in the first 12 months of closing the transaction.
Siemens separated Healthineers in 2018 but retains an 85% stake and intends to remain a majority shareholder for the long term. The company specializes in medical imaging and laboratory diagnostics.
Varian is a global leader in cancer care, particularly radiation oncology, and uses artificial intelligence, machine learning, and data analysis to improve cancer treatment.
The two companies have been working together since 2012 on a partnership to improve cancer therapy.
Siemens will provide Healthineers with a € 15.2 billion bridging facility to help finance the transaction. Healthineers will cover about half of this amount by issuing new equity, with the remainder being refinanced by debt provided by Siemens or one of its subsidiaries. Siemens said its stake in Healthineers would decrease to around 72%.
Bernd Montag, CEO of Siemens Healthineers, said the deal was “two leaps in one step.” ” [It is] a leap in the fight against cancer and a leap in our overall impact on health care, ”he said.
The combination “means more hope and less uncertainty for patients, an even stronger partner for our customers and for more effective and efficient medical care society,” he said.
Dow Wilson, CEO of Varian, said the agreement “brings us even closer to realizing our transformative vision of a world free from cancer fear.
Last year, Varian, which is based in Palo Alto, Calif., Generated revenue of $ 3.2 billion, with an adjusted operating margin of around 17%. It employs around 10,000 people around the world.
In justifying the deal with Varian, Siemens said in a statement that the prevalence of cancer is expected to nearly double between 2010 and 2030, with more than 50% of all cancer patients undergoing radiation therapy, according to the International Center for Research on Radiation. the cancer.
“At the same time, the significant growth in therapeutic innovations is driving the demand for personalized diagnosis and therapy planning, implementation and monitoring,” said Siemens.
The German company said it expects synergies of at least € 300 million per year in fiscal 2025 as a result of the deal with Varian. Varian will continue to operate under its current name, as the Siemens Healthineers brand.