As part of the agreed transaction, Siemens Healthineers will acquire all of Varian’s shares for $ 177.50 each in cash, which is a 24% premium over the U.S. company’s closing price on Friday.
Siemens Industrial Conglomerate (SIEGn.DE), which split Healthineers in 2018 but retains a controlling stake, will provide interim funding for the deal, which aims to create a global leader in cancer treatment solutions by 2025.
“With this combination of two leading companies, we are making two leaps in one step: a leap in the fight against cancer and a leap in our overall impact on healthcare,” said Bernd Montag, CEO of Siemens Healthineers.
Varian President and CEO Dow Wilson said, “With Siemens Healthineers, we will transform care for more patients around the world and expand opportunities for our employees as part of a larger organization. larger and more global. ”
The deal, first reported by Bloomberg, is subject to approval by Varian shareholders and regulators. It is expected to close in the first half of 2021 and grow Siemens Healthineers’ adjusted basic earnings per share within 12 months.
BALANCE SHEET SUPPORT
Siemens is effectively putting its balance sheet at the service of financing the operation, by granting a bridge loan of 15.2 billion euros (17.9 billion dollars) to Healthineers.
The medical technology unit aims to replace 50% with a rights issue this year, subject to market conditions.
Siemens said in a separate statement that it expressly welcomes the deal and will raise funds for the bridge loan by issuing bonds. As a result, its stake in Healthineers would be diluted to approximately 72% from 85%.
Separately, Healthineers’ third-quarter budget results, pre-released instead of Monday due to the acquisition announcement, showed revenue fell 6.9% year-over-year. the other on a comparable basis at 3.3 billion euros, due to the impact of the coronavirus pandemic.
Its adjusted operating margin stood at 13.9%, down 1.2 percentage points from the same period a year earlier, while adjusted basic earnings per share fell 21% to 30 euro cents.
Revenue is expected to remain stable in fiscal 2020, while adjusted basic earnings per share would be between 1.54 and 1.62 euros, compared to 1.70 euros last year, in the assumption where the business environment would not deteriorate further. (1 USD = 0.8493 euros)
Additional reporting by Joern Poltz; Edited by Gareth Jones and Susan Fenton
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