Erlanger, Germany-based Siemens Healthineers, usually linked with MRI and lab equipment and technology, is branching out to include cancer treatment technology. A rapidly expanding market, cancer treatment has not been a significant presence in Siemens’ portfolio until this month.
Healthineers has struck a deal with Palo Alto-based Varian Medical Systems, which produces medical devices and software used in cancer therapies. Siemens’ top-notch detection and diagnostics systems paired with Varian’s technology sets the companies up to blaze trails in the rapidly growing cancer technology industry.
The deal, a $16.4 billion cash move, is 2020’s largest in healthcare to date. It also marks the first significant acquisition made by Siemens’ Healthineers, which was developed from its parent company in 2018. The purchase will be made possible by both equity and debt, including a $17.9 billion bridge loan from parent company Siemens AG.
Siemens AG’s stake in Siemens Healthineers will drop from 85% down to 72%, a move which possibly helps Healthineers get a little closer to its own entry into the German DAX Index. According to Jochen Schmitz, the company’s Chief Financial Officer, Index inclusion isn’t part of the immediate plan, but is something that will likely be examined next year.
“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,” said Siemens Healthineers Chief Executive Officer Bernd Montag. “This decisive moment in the history of our companies means more hope and less uncertainty for patients.”
Varian will remain a separate company within the Siemens Healtineers umbrella, but with the added capital can rapidly move forward with their mission to provide more intelligent ways to prevent and treat cancer, using AI-driven solutions for personalized cancer care. According to Dow Wilson, Varian’s President and Chief Executive Officer, “The combination with Siemens Healthineers brings us even closer to realizing our transformative vision of a world without fear of cancer.”
He went on to describe how the combination of the two companies will enable oncology patients across the globe receive more transformative and personalized care.