By Tom Fairless 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (August 3, 2020).

FRANKFURT -- Siemens Healthineers AG, a medical technology spinoff of the German conglomerate, said it would acquire U.S.-based Varian Medical Systems Inc. for $16.4 billion, roughly 25% above its current market value.

The deal will create a world leader in the area of cancer therapy, Siemens deputy CEO Roland Busch said in a statement Sunday.

Varian, based in Palo Alto, Calif., specializes in cancer treatments including radiation therapy and related software. It has around 10,000 employees globally and revenue of $3.2 billion in fiscal 2019, Siemens said.

The conglomerate said its stake in Siemens Healthineers, based in Erlangen, Bavaria, would fall to about 72% from 85% as a result of a capital increase to fund the deal, in which Siemens won't participate. Siemens had spun off its medical technology unit in 2018.

"A transformational step of this kind wouldn't have been possible in the conglomerate structure of the old Siemens AG," Siemens President and CEO Joe Kaeser said in a statement.

The deal, to be financed through a capital increase and new debt, is expected to close in the first half of 2021, subject to approval by Varian shareholders and regulatory approvals, Siemens said.

Siemens said it would "remain a strong majority shareholder and thus profit from the company's considerably expanded setup."

Write to Tom Fairless at tom.fairless@wsj.com

 

(END) Dow Jones Newswires

August 03, 2020 02:47 ET (06:47 GMT)

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