Siemens Healthineers announces plans to acquire Varian for US$16.4bn
Siemens Healthineers announced early August that it plans to acquire Varian in an initiative to advance the fight against cancer and strengthen its position in healthcare.
Siemens Healthineers and Varian Medical Systems said that they have entered into an agreement, pursuant to which Siemens Healthineers shall acquire all shares of Varian for US$177.50 per share in cash. This corresponds to a purchase price of approximately US$16.4 billion.
Varian’s Board of Directors unanimously approved the agreement and recommends to the Varian shareholders also to approve the agreement. The acquisition of Varian is expected to close in the first half of calendar year 2021, with closing being subject to approval by Varian shareholders, receipt of regulatory approvals and satisfaction of other customary closing conditions.
Dr. Bernd Montag, CEO of Siemens Healthineers, commented: “With this combination of two leading companies we make two leaps in one step: A leap in the fight against cancer and a leap in our overall impact on healthcare. This decisive moment in the history of our companies means more hope and less uncertainty for patients, an even stronger partner for our customers, and for society more effective and efficient medical care. Together with Varian's outstanding and passionate employees, we will shape the future of healthcare more than ever before.”
Dow Wilson, President and CEO of Varian, said: “Varian’s innovative and patient centric culture has enabled us to become an iconic leader in radiotherapy and multi-disciplinary cancer care, with a trusted global brand and strong customer loyalty. Siemens Healthineers values our talented and engaged employees and recognizes the strength of the Varian brand, our cutting-edge portfolio, and the relationships we’ve nurtured. We are thrilled to partner with Siemens Healthineers to extend our renowned customer care, serving clinicians and patients from the very first stage in the fight against cancer. 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 organization.”
Varian is a world leader in the field of cancer care, with innovative solutions especially in radiation oncology and related software. In fiscal year 2019, the company generated revenues of US$3.2 billion with an adjusted operating margin of approximately 17 percent. Varian is headquartered in Palo Alto, California, USA, and currently employs approximately 10,000 people worldwide. With a holistic approach to cancer care, the company is increasingly leveraging technologies such as artificial intelligence, machine learning and data analysis to further improve cancer treatment and expand access to care.
Since 2012, Siemens Healthineers and Varian have been working together successfully in the strategic “EnVision” partnership to shape the future of cancer treatment, combining Varian’s innovative therapeutic systems and Siemens Healthineers leading imaging technology. This transaction builds on this long-standing partnership to develop improved cancer therapy solutions – from imaging for treatment planning to focused radiation therapy – for efficient workflow and effective, personalized treatment.
Siemens Healthineers plans to finance the acquisition of Varian with a mix of debt and equity. Siemens Finance B.V., a subsidiary of Siemens Aktiengesellschaft, will provide Siemens Healthineers for a transitional period with a bridge facility in an amount of EUR 15.2 billion to finance the acquisition price and additional costs and expenses in connection with the acquisition of Varian.
Siemens Healthineers plans to replace up to approximately 50 percent of the amount available under the bridge facility granted by Siemens Finance B.V. through the issuance of equity. For this purpose, Siemens Healthineers intends to increase the share capital by issuing new shares with subscription rights expected to be excluded. In a first step, Siemens Healthineers plans to place new shares without a prospectus, depending on market conditions, still within calendar year 2020. The issuance of new shares will raise the free float and presumably the trading volumes of Siemens Healthineers shares. It is planned that the remaining amounts under the bridge facility will be refinanced through debt provided by Siemens AG or one of its subsidiaries to Siemens Healthineers. Such debt will be raised externally by Siemens AG and then be passed on to Siemens Healthineers through loans at market conditions. After closing, Varian will continue to operate under the Varian name, as a Siemens Healthineers brand.