Siemens plans to spin off health unit

China Daily (USA) - - BUSINESS - By BLOOMBERG

Siemens AG an­nounced plans to spin off its $15 bil­lion health­care di­vi­sion to help drive in­vest­ments at one of its most suc­cess­ful units, in one of the big­gest port­fo­lio re­vamps at the Ger­man en­gi­neer­ing gi­ant that nar­rows its fo­cus on en­ergy, trans­port and fac­tory gear.

The com­pany is pur­su­ing a pub­lic list­ing of the as­set, with de­tails on the planned scope and tim­ing to fol­low, Siemens said on Thurs­day as it an­nounced earn­ings. Profit from so-called in­dus­trial oper­a­tions reached 2.45 bil­lion eu­ros ($2.68 bil­lion) in the three months through Septem­ber, lit­tlechanged­fromthe year-ear­lier pe­riod. An­a­lysts had pre­dicted an av­er­age of 2.41 bil­lion eu­ros.

“Health­care is one of the most at­trac­tive busi­ness, if not the most at­trac­tive we have in the com­pany,” Chief Ex­ec­u­tive Of­fi­cer Joe Kaeser said in an in­ter­view with Bloomberg TV. “We be­lieve we want to fo­cus it more.”

Siemens is bet­ting that its health­care unit can cap­ture growth bet­ter as a stand­alone busi­ness, though the com­pany would seek to re­tain con­trol of the as­set, ac­cord­ing to Chief Fi­nan­cial Of­fi­cer Ralf Thomas.

Kaeser has been shift­ing the com­pany to­ward its en­ergy di­vi­sions, which in­clude its wind-tur­bine busi­ness, and the CEO said he doesn’t ex­pect any de­mand swings in that field from Don­ald Trump’s as­cent to the White House.

The plan to list its health­care unit fur­ther whit­tles down the com­pany’s sprawl­ing port­fo­lio, which in­cludes high-speed trains, wind tur­bines and med­i­cal scan­ners. Over the past decade, Siemens has largely re­treated from con­sumer-ori­ented prod­ucts and fo­cused on in­dus­trial ap­pli­ca­tions, sell­ing ar­eas like phones, light bulbs and hear­ing aids. Among Siemens’s big­gest re­cent di­vest­ments was the Os­ram light­ing unit, though Thomas said it would be “wrong to com­pare” the as­set with health­care.

Sales in the fourth quar­ter rose 3 per­cent to 21.95 bil­lion eu­ros, while or­ders slipped 14 per­cent af­ter the com­pany took in some large or­ders in the year-ear­lier pe­riod.

REUTERS

An em­ployee watches a ro­tat­ing Com­puted To­mog­ra­phy “CAT scan” at a Siemens plant in Forch­heim, Ger­many.

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