Siemens Healthcare Sets Sights On M&A
Siemens Healthcare is eager to pursue mergers and acquisitions, said the division’s CEO Bernd Montag, who added that he would only seek deals that fit the healthcare business’ long-term goals, which include a legal separation from its parent company, reports Reuters. Siemens has confounded industry expectations and achieved great success with a corporate reconstruction plan launched last year.
The Siemens Vision 2020 strategy aims to reposition the company to face a changing macroeconomic and geopolitical landscape by streamlining divisions and refocusing on innovation, according to Siemens CEO Joe Kaeser.
As part of that plan, Kaeser appointed Montag as head of the healthcare unit during an executive shake-up last year, reported Bloomberg. Kaeser also granted the division greater operational freedom — which some saw as the beginning of a long-term plan to divest the business or spin off a standalone healthcare company.
“While some divisions provided excellent performance, healthcare needs to step up its efforts,” said Kaeser in a January 2015 press conference.
Over the past year, Siemens Healthcare has been developing innovative technology and new indications for existing technologies. The FDA recently cleared Siemens’ SOMATOM computed tomography (CT) systems for the “most expansive indication” for lung cancer screening, and Siemens researchers have teamed with Dutch scientists to develop a biopsy robot equipped with ultrasound and MRI technology.
Collaborating with the National Institute of Health’s (NIH) Clinical Center, Siemens Healthcare is working to develop next-generation CT scanners, called photon-counting detector CT scanners, which would enhance imaging while exposing patients to a minimal amount of radiation.
In a recent earnings call, Kaeser reported that Siemens Healthcare experienced double-digit adjusted growth in 2015, which included a sharp rebound in orders coming out of China. Kaeser said he expected these figures to remain consistent throughout 2016, with diagnostics showing the greatest potential for future growth.
Reuters reported that Siemens healthcare division is on track in “the process of getting legally separated” from Siemens, and Montag commented that mergers and acquisitions would be a large part of their future strategy.
“We are definitely hungry, but not for the sake of growth…but when it fits into the strategy we have laid out,” said Montag at a press conference, adding that M&A is a “means to an end” for Siemens Healthcare moving forward.