Siemens to crystalise the value of its healthcare business in first half of 2018

This will be Germany’s largest IPO since Deutsche Telekom’s in 1996.

Ahead of Healthineers’ IPO scheduled for the first half of 2018, Siemen’s healthcare business, the German giant will test the appetite of sovereign wealth funds to secure anchor investments for its planned listing, said Siemen’s Chief Executive to a German weekly.

The IPO of Healthineers, which manufactures MRI machines and X-rays is expected to generate around $48 billion (40 billion euros).

According to sources, Siemens is likely to sell 15% to 25% of Healthineers, which implies that stocks worth at least 6 to 10 billion euros are likely to be up for sale, which makes it Germany’s biggest share offering since Deutsche Telekom’s IPO in 1996.

“Internal preparations are going well and we are still planning the listing in the first half of 2018, if markets play along,” said Joe Kaeser to Frankfurt Allgemeine Sonntagszeitung in an interview. “In any case, we are planning to test the interest of relevant anchor shareholders, including sovereign wealth funds.”

When asked whether this included China and Norway, home to the world’s third-largest and largest state funds respectively, Kaeser said: “We will probably cover the range of the most important state funds, yes. The advantage would be that we would gain anchor investors. The disadvantage: the free float of shares is not as high.”

The move to partially offload some of its stake in its healthcare business is designed to enable its unit to stand on its own feet, raise its own funds for investments and takeovers as well as crystalisize its own value from the “conglomerate discount” that weighs on Siemens’ valuation.

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