Put your right foot in

2 August 2020 By Robert Cyran Follow @rob_cyran

Siemens Healthineers is re-entering radiation treatment about a decade after exiting, buying Varian. Combining diagnostics and treatments is a good idea. But savings don’t cover the $3 bln premium, and a financial wheeze from Siemens doesn’t compensate.

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Siemens Healthineers said on Aug. 2 it had agreed to buy Varian Medical Systems for $16.4 billion. The German group, which was spun off from Siemens in 2018 is paying a 24% premium to the American radiation therapy group, based on the company’s closing stock price on July 31.

Siemens is effectively providing a bridge loan of 15.2 billion euros to Healthineers. That company aims to replace 50% of this through a rights issue this year. Siemens said it will raise the money by issuing bonds which will be passed on to Healthineers. Siemens will not participate in the rights issue, after which its stake in Healthineers will fall from 85% to 72%.

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