Azernews.Az

By Bloomberg

Siemens AG, Europe’s largest engineering company, is informing workers of plans to give its health-care division more independence ahead of the possible sale of a minority stake, according to a person with knowledge of the matter.

The manufacturer of body scanners is sending a letter to 11,000 employees in Germany in the next week, giving them a month to decide whether to join a new legal entity dubbed Siemens Healthcare GmbH, said the person. It will remain owned entirely by Siemens, with the same employment conditions, according to the person, who asked not to be identified.

The Munich-based company is open to divesting a minority stake in the division, either to a strategic investor or in a partial stock-listing, the person said, adding that health-care companies trade at a higher multiples than Siemens’ other industrial areas.

Siemens granted the health-care business greater independence from Oct. 1 as the division has little overlap with the rest of the company. Last month, division head Hermann Requardt stepped down, with board responsibility for health-care passing to human resources head Siegfried Russwurm, with Bernd Montag taking over the operational management.

Establishing a separate legal entity will help the division adopt the right sales strategies for its market, Siemens Chief Executive Officer Joe Kaeser said Jan. 27.

Siemens’s enterprise value represents about 1.2 times its annual sales of 79 billion euros, according to Bloomberg data. Health-care equipment companies active in the same fields have in the past two years been sold for about four times their total sales, Bloomberg data shows.

Stakes in the health-care division could be used in asset swap deals or to take advantage of other companies’ expertise or sales channels, the person said, adding that Siemens may still decide to retain complete ownership of the business if no suitable deal is found.