Sun, Mar 18, 2018 page16

• Siemens’ health unit shares surge in Frankfurt debut

  • AFP, FRANKFURT AM MAIN, Germany
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  Shares in Siemens AG’s medical technology unit surged in their debut on the Frankfurt stock exchange on Friday, after the industrial giant raised 4.2 billion euros (US$516.45 million) in a more muted than expected initial public offering (IPO).

  Shares in Siemens Healthineers jumped more than 8 percent to close at 30.38 euros on the first day of trading, whose start was delayed by about 45 minutes because of a technical hitch.

  The market launch was one of Germany’s biggest in recent years, but nevertheless fell below expectations after Siemens priced the 150 million shares up for grabs — representing a 15 percent stake in Healthineers — at 28 euros per share.

  

  Michael Sen, supervisory board chairman of Siemens’ medical technology subsidiary Healthineers, rings the bell as others applaud during the official first trading of shares in Healthineers following the company’s initial public offering at the Frankfurt Stock Exchange in Frankfurt Am Main, Germany, on Friday.

  Photo: EPA-EFE

  The price came in at the bottom end of Siemens’ initial guidance of 26 to 31 euros per share, and values the medical company at about 28 billion euros.

  One of Siemens’ largest and most valuable divisions, Healthineers supplies hospitals around the world with everything from X-ray and MRI machines to lab diagnostics gear and robotic arms used in the operating room.

  It is in robust health, achieving an operating profit margin of about 18 percent last year and revenue of 13.8 billion euros, second only to Siemens’ flagship but troubled power and gas unit.

  Its flotation comes as the sprawling Siemens conglomerate seeks to become more nimble in response to changing markets and stronger competition.

  The group last year announced a merger of its train construction business with French rival Alstom SA to create a European rail giant, merged its wind energy unit with Spain’s Gamesa Corp Tecnologica SA and unveiled plans to slash about 7,000 energy jobs due to falling global demand for its power plant turbines.

  Healthineers’ IPO was tipped to be the largest on Frankfurt’s blue-chip DAX in more than two decades when it was first announced by Siemens late last year, with analysts estimating the offering would generate about 9 billion euros.

  However, those expectations were dashed when Siemens this month said it would offer the stock at the lower-than-expected 26 to 31 euros per share, partly because of a spike in market volatility in recent weeks that has sapped investor demand.

  The last Frankfurt IPO of a similar size was 2016’s listing of RWE AG’s renewables spin-off Innogy SE, which raised about 4.6 billion euros.

  Healthineers is a world leader in medical imaging products in terms of annual revenues, but it lags behind competitors such as General Electric Co, Roche Holding AG and Royal Philips NV in the areas of diagnostics — which includes machines to analyze blood and urine tests — and advanced therapies, which focus on enabling minimally invasive medical procedures.

  Siemen chief financial officer Ralf Thomas, who helped ring the opening bell, expressed satisfaction at Healthineers’ debut, saying that the group looked forward to the company’s development “to the benefit of all shareholders.”

  However, he was coy about what Siemens would spend the IPO windfall on.

  “We always take one step at a time. When we have something to say, we’ll say it,” he told reporters in Frankfurt.
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