Siemens to reduce $39 billion Healthineers stake with spin-off to shareholders

By John Revill and Alexander Hübner

ZURICH/MUNICH (Reuters) -Siemens said on Wednesday it would cut its 33.5 billion euro ($39.07 billion) stake in Siemens Healthineers by transferring shares in the medical equipment maker to its own shareholders.

The German engineering group will reduce its 67% stake to 37% or less by giving 30% of its Healthineers stock to Siemens shareholders, it said, noting that a direct spin-off was the "preferable option".

Siemens will continue reducing its holding to less than 20% in the medium term, and could start doing so before the spin-off is approved, CEO Roland Busch said.

MOVE SEEN AS WAY TO INCREASE SIEMENS' FOCUS ON TECH

Siemens' future investment in Healthineers, a maker of medical imaging and diagnostics equipment that it floated in 2018, has been debated among investors in recent months. It has gradually cut its initial 85% stake in Healthineers, selling 2% for around 1.45 billion euros in February.

Siemens will get no money from the stock transfer, which would help the company focus on its core areas of factory and building automation as well as its train-making Mobility business.

"Both companies can now operate in a more focussed and agile way," Busch said in relation to Siemens and Healthineers.

The separation from Healthineers would allow Siemens to focus on its software and digital businesses which link hardware to artificial intelligence, he said, adding he did not want to sell Mobility.

"It's a perfect fit," he said. "They are leading the Champions League because they are part of Siemens."

No timing was given for the spin-off, which is subject to approvals from its shareholders and investors at Healthineers. An EGM could be needed to get the required approvals.

Siemens is also now waiting approval from the German tax authorities for the spin-off, which is more favourable than distributing the shares as a dividend in kind, which analysts said could mean a large tax bill.

"It will work," Busch said.

SIEMENS HEALTHINEERS, LARGE INVESTOR WELCOMES MOVE

Healthineers welcomed the move, which could boost its share price by removing the uncertainty over what Siemens will do with its stake.

"We appreciate the clarity," said Chief Executive Bernd Montag. "It continues our journey to becoming a fully independent company."

The divestment has been seen by investors as a chance for Busch to stamp his mark on the company he has led since 2021. His contract runs until 2030.

Some large shareholders had also wanted Siemens to reduce its stake to concentrate on its core businesses of industrial and building automation.

"This is an important step that we welcome," said Maria Mihaylova, fund manager at Union Investment, a top 20 investor in Siemens.

"Through this deconsolidation Siemens can concentrate more on its core industrial businesses," she added.

On Wednesday, Siemens also announced that CFO Ralf Thomas will step down in fiscal 2026 and be replaced by Veronika Bienert, who is CEO of Siemens Financial Services.

Thomas, 64, will remain on the supervisory board of Healthineers after his departure from Siemens.

(Reporting by John Revill and Alexander Hubner; Editing by Mark Potter, Tom Sims, Richard Chang and Diane Craft)