LONDON: Siemens Healthineers AG raised €2.34bil (US$2.8bil or RM11.5bil) selling new shares to help finance its purchase of Varian Medical Systems and chart a path toward joining Germany’s bluechip DAX Index.
The company issued 53 million shares at €44.10 each, offering them exclusively to institutional investors via an accelerated bookbuilding process, it said in a statement yesterday.
Siemens Healthineers got enough orders to cover the private placement, with approximately 16% of the offer going to Qatar Investment Authority.
Siemens Healthineers agreed to buy Varian for about US$16.4bil in cash last year, giving it a sizable market share in the rapidly growing field of cancer treatment.
The deal was financed by a €15.2bil bridge loan from parent Siemens AG. The company plans to use the funds from its share sale to replace part of that facility.
Siemens Healthineers’ possible DAX inclusion has been a burning question for investors and analysts since the company was brought to market three years ago.
Because of Siemens Healthineers’ small free-share float – Siemens holds about 79% of the stock – it has been left out of the coveted index despite an almost €50bil market capitalisation.
Joining the DAX is a clear goal of chief executive officer Bernd Montag, and selling new shares may bolster the German company’s case for being selected for the index.
With Palo Alto, California-based Varian, Siemens Healthineers is gaining access to devices and software used to treat cancer. Recent developments in radiation therapy, coupled with more precise imaging, have been linked to lower death rates, a trend the maker of MRI machines and laboratory equipment is keen to capitalise on.
Siemens Healthineers shares closed at €46.38 yesterday. The firm doesn’t plan additional share sales to finance the Varian deal, it said.
JPMorgan Chase & Co and UBS Group AG are joint global coordinators.
Berenberg, Credit Suisse Group AG, Deutsche Bank AG and UniCredit SpA are joint bookrunners. Bank of America Corp, BNP Paribas SA and HSBC Holdings Plc are co-bookrunners. — Bloomberg