A workshop of computed tomography scanners of medical device firm Siemens Healthineers in Shanghai, China. Picture: REUTERS/ALY SONG
A workshop of computed tomography scanners of medical device firm Siemens Healthineers in Shanghai, China. Picture: REUTERS/ALY SONG

German health group Siemens Healthineers said on Sunday it was buying US cancer treatment device maker Varian Medical Systems for $16.4bn, giving it a foothold in the oncology sector.

The takeover seeks to create a global leader in cancer-care solutions by 2025.

Industrial conglomerate Siemens, which spun off Healthineers in 2018 but retains control, said it will provide bridge financing for the deal. Under the agreed transaction, Siemens Healthineers will acquire all shares in Varian for $177.50 each in cash, representing a 24% premium to the US company’s closing price on Friday and 42% above its 30-day weighted average.

“With this takeover, we are significantly strengthening our position — in addition to cardiology and neurology — in the field of oncology,” CFO Jochen Schmitz said in an interview.

Through the deal, Siemens Healthineers is addressing a long-term rise in the incidence of cancer — from 14-million cases worldwide in 2010 to a forecast 25-million  in 2030.

That translates into an addressable market of $20bn that is forecast to grow at an annual rate of 6%-10%, the company said in a presentation on the deal.

The transaction, 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 be accretive to Siemens Healthineers’s adjusted basic earnings per share within 12 months of that.

“With Siemens Healthineers, we will transform care for a greater number of patients worldwide, as well as broaden opportunities for our employees as part of a larger and more global organisation,” Varian president and CEO Dow Wilson said.

Reuters

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