Siemens Reevaluates Majority Stake in Siemens Healthineers Amid Limited Synergies

Siemens is reviewing its majority stake in medical technology subsidiary Siemens Healthineers due to limited synergies. The German technology group's CFO Ralf Thomas stated that the capital commitment of €45 billion is not justified. Siemens may sell around 5% of Healthineers in the future to finance the takeover of U.S. software company Altair. Thomas remains committed to the Mobility train division, dismissing the need to spin it off.

In a surprising move, German technology conglomerate Siemens is reportedly reviewing its majority ownership of medical technology subsidiary Siemens Healthineers [1]. The rationale behind this potential divestiture stems from the limited synergies between the two entities and the need to raise funds for the acquisition of U.S. software company Altair [1].

Siemens Healthineers, a leading provider of medical technology, diagnostics, and therapeutic solutions, has been a part of the Siemens Group since 2015. However, according to Siemens' Chief Financial Officer, Ralf Thomas, the €45 billion capital commitment to the subsidiary is no longer justified [2]. This revelation comes amidst Siemens' ongoing efforts to streamline its operations and focus on its core businesses.

Thomas emphasized his commitment to Siemens' Mobility train division, dismissing the need to spin it off [2]. This division, which includes rail automation and electrification solutions, has been a significant contributor to Siemens' revenue and profitability.

Siemens' potential sale of a stake in Siemens Healthineers could potentially raise around €2.25 billion, based on the subsidiary's current market capitalization [3]. This capital infusion could be crucial in financing Siemens' acquisition of Altair, a leading provider of simulation-based engineering software. This acquisition would enable Siemens to expand its digital offerings and enhance its engineering capabilities.

The Siemens Annual Shareholders' Meeting, scheduled for February 13, 2025, is expected to provide further insights into the company's strategic direction and any potential divestitures [1]. The meeting will be held in a virtual format, allowing shareholders from around the world to participate.

References:

[1] "Siemens Reviewing Stake in Healthineers Amid Limited Synergies - Sources," Reuters, December 12, 2024, https://www.reuters.com/business/healthcare-pharmaceuticals/siemens-reviewing-stake-in-healthineers-amid-limited-synergies-sources-2024-12-12/.

[2] "Siemens CFO Ralf Thomas Discusses Future of Healthineers Stake," Seeking Alpha, December 13, 2024, https://seekingalpha.com/news/3841248-siemens-ceo-ralf-thomas-discusses-future-of-healthineers-stake?utm_source=feed_news&utm_medium=referral.

[3] "Siemens Healthineers AG (SHL) Market Cap," MarketWatch, December 12, 2024, https://www.marketwatch.com/investing/stock/shl/market-cap.