Siemens To Separate Healthcare Business, Spin Off Audiology Unit
By Jof Enriquez,
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Siemens AG has prepared to separate its healthcare division and publicly list its audiology business unit as a part of an overhaul initiated by new president and CEO Joe Kaeser. The strategic realignment is intended to streamline the business, reducing its divisions from 16 to 9.
According to a company press release, Siemens’ healthcare business will be managed separately in the future, allowing the healthcare part of the business to adapt to the ever-changing requirements of the medical technologies marketplace, unhindered by the rest of the company’s organizational matrix.
Nicholas Heymann, an analyst for financial services firm William Blair, told Bloomberg that the detachment of Siemens Healthcare management suggests that the business will be “IPO’d, spun out, sold, or swapped.”
As part of the partitioning of its healthcare sector, Siemens is also publically listing its audiology unit.
While the multinational company’s hearing aids business has posted strong growth and increased market share in the past few years, it is not synergistic with the rest of Siemens’ business groups. In order for the audiology business group to remain unhindered, Siemens has decided to “give the business an opportunity to better leverage its potential outside the company,” according to a company press release. This will allow for the audiology group to take advantage of the growth of the overall market for hearing aids, which is projected to grow 4 percent annually until 2020.
The decision to partition its healthcare business and publicly list its audiology unit coincides with the company’s overall 2020 strategic realignment that is focused on long-term growth and high profitability using established strengths.
"In the future, Siemens AG will position itself along electrification, automation and digitalization, where it has identified growth fields in which it sees its maximum long-term potential," the company said in the reorganization press release.
Under the new setup, the company’s previous nine divisions include power and gas, energy management, wind power and renewables, building technologies, process industries, power generation services, mobility, digital factory, and financial services.
In addition to the massive corporate overhaul, Siemens has been involved in recent, high-profile deals that also coincide with the new company strategy.