Siemens' Microbiology Unit Up for Sale? - Analyst Blog
March 13 2014 - 5:00PM
Zacks
According to a Bloomberg report,
diversified electronics goods manufacturer Siemens
AG (SI) is contemplating the sale of its microbiology
unit. This is part of Siemens’ restructuring strategy to stop the
slide in its profitability. The move is also intended to bring into
renewed focus its core businesses, which command a significant
market share, unlike the microbiology unit that has a smaller pie
of the market.
The microbiology unit supplies equipment for bacterial
identification and antibiotic susceptibility testing. The division
entails significant investments in R&D on a recurring basis to
remain competitive. Amid stiff competition from other established
players, such investments fail to generate healthy ROI. Not
surprisingly, the company is probably thinking on the lines of
divesting the unit altogether.
Siemens had expanded its healthcare division in 2006 and 2007
through a string of acquisitions. The company splurged about 11
billion euros in an acquisition spree by buying Diagnostic Products
Corp., Bayer AG’s (BAYRY) diagnostics unit and
Dade Behring Holdings Inc.
Siemens has reportedly hired investment banks to tap the market and
seek potential buyers that could fetch anywhere between $300
million and $600 million. Even buyout financial firms like
The Blackstone Group L.P. (BX) and The
Carlyle Group LP (CG) have joined the fray of probable
bidders for the likely sale. However, Siemens as well as Blackstone
and Carlyle has refused to comment on the issue.
Siemens Healthcare, of which the microbiology unit is a part, is
one of the leading solutions providers to the medical industry. Its
product portfolio ranges from hearing instruments, diagnostic
imaging systems, therapy equipment, and intensive care units to
clinical and administrative IT solutions
Siemens, the parent company, is a German industrial conglomerate
with interests in information services, automation and controls,
medical equipment, power generation, transportation systems,
automotive electronics, and lighting.
Siemens currently has a Zacks Rank #3 (Hold).
BAYER A G -ADR (BAYRY): Free Stock Analysis Report
BLACKSTONE GRP (BX): Free Stock Analysis Report
CARLYLE GROUP (CG): Free Stock Analysis Report
SIEMENS AG-ADR (SI): Free Stock Analysis Report
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