Is This Going To Be The Biggest European Sale Of Stocks ?

Europe’s largest engineering company Siemens AG is reportedly planning to sell shares in its healthcare unit Siemens Healthineers this year in the first half. However, it will retain the majority of stake in the company whose name is the portmanteau of the words ‘health’ and  ‘engineers’.


Siemens Healthineers specializes in the manufacturing of imaging and diagnostic equipment of the hospitals. The IPO of this company on the Frankfurt Stock Exchange is likely to be one of the biggest equity offerings ever in Germany.

Siemens is expecting the value of the company to be between $40 billion and $50 billion. The company has an annual revenue of close to $17.4 billion and currently employs over 47,000 people.

Opinions on the IPO

Joe Kaeser, the Chief Executive Officer is targeting a 25 percent sale of the stakes amounting to almost $12.4 billion.

Michael Sen, the chairman of the supervisory board of the healthcare unit said, “Siemens Healthineers is a premium asset and we have worked hard to now list such an exciting franchise. We expect the business to capitalize on its strengths even more effectively after the listing.”


Martin Steinbach, a partner and head of IPO services at EY is of the opinion that such big transactions are at the right time as the global stock markets are in the phase of recovery from volatility.

What the dividend plan is

In 2017, the health business had revenue of 13.8 billion euros. Siemens Healthineers are targeting to pay a dividend of 50-60 percent of net income, according to the company.

The sale is being arranged under the supervision of Deutsche Bank AG, Goldman Sachs Group Inc., and JPMorgan Chase & Co.

What it means for the company

In the past, Siemens had the deal wherein the wind power unit was merged with Spanish competitor Gamesa SA. Also, the CEO is planning to combine the company’s train business with that of Alstom SA.


However, there have been hurdles for the company in the past transactions. The renewable energy merger had profit issues due to the problems with the wind sector companies in Asian markets.

At the beginning of the year, there has been a stumble in the global equity markets resulting in the cancellation of some planned IPOs. After the recovery, Siemens is planning to go ahead with the IPO after initial plans to sell a minority stake in November 2016.

As per the company, Siemens Healthineers will remain core to the parent company and will be combined with its financial accounts.


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