By John Revill
ZURICH (Reuters) -German engineering group Siemens is expected to set out how it will cut its 35 billion euro ($41 billion) Siemens Healthineers stake on Thursday.
A sizeable disposal, which would dwarf recent divestments such as SoftBank selling part of T-Mobile for $4.8 billion, would give Siemens CEO Roland Busch financial firepower to pursue M&A.
CFO Ralf Thomas said last year that Siemens would present its decision on Healthineers at its capital markets day, which takes place this week.
Siemens listed the maker of medical imaging and diagnostics equipment in 2018 but kept an initial 85% stake. It has since gradually cut its holding, selling 2% for around 1.45 billion euros in February.
Deka Investment, a top 15 Siemens shareholder, wants it to reduce the stake from just below 70% now to 51%, before possibly further reducing the Healthineers holding.
Ingo Speich, Deka’s head of sustainability and corporate governance, said it was chance for Busch, 60, to focus Siemens more on artificial intelligence and industrial software.
CEO’S CHANCE TO SHAPE LEGACY
Busch, whose contract runs until 2030, has led Siemens since 2021 and decisive moves could shape his legacy, Speich said.
“This is probably the last term for Busch. He’s delivered decent earnings but he hasn’t really left a major footprint where he shaped Siemens for the next decade,” he told Reuters.
Another large Siemens investor, who asked not to be named, also wants Siemens to cut its Healthineers stake below 50% over the next few years, with a gradual selldown.
“The most important decision on Thursday will be what happens with Healthineers,” said the investor.
Siemens declined to comment on its plans or a Bloomberg report that it would reduce its stake to below 40% by giving its shareholders Healthineers stock.
EXIT WOULD BOOST M&A FIREPOWER
Although Healthineers is regarded as a good quality business, exiting would allow Siemens to focus on areas such as industrial software and automation.
It would also give it more scope to pursue acquisitions that deepen capabilities that complement its hardware range, which includes factory controllers and sensors.
“It’s logical to use the money raised from Healthineers in a different way, either by giving it to shareholders, or as an acquisition currency,” said Deka’s Speich.
“Busch wants a strong Siemens to avoid any takeover rumours and it’s important to have a large Siemens with the financial power for large acquisitions,” he said.
Analysts say exiting will be complex and could take years.
THREE LIKELY OPTIONS FOR REDUCING STAKE
Siemens would most likely pursue one of three options, Barclays’ Vlad Sergievskii said.
It could give Healthineers shares to its investors as a dividend in kind, transfer them to a separate holding vehicle and spin this off to shareholders or gradually sell the stake, he said.
If Siemens distributed two thirds of its Healthineers stake as a dividend in kind, it would have to pay 7 billion euros in German tax, said JP Morgan, adding: “There are smarter ways to structure a process like this”.
Giving away the shares directly or indirectly through a new company would not generate money for Siemens and would end up creating a secondary Healthineers listing.
Meanwhile, a sell down could be a lengthy process as Siemens would have to avoid driving down the share price by landing large volumes on the market.
Siemens shares have gained 31% in 2025, outperforming the Stoxx Europe Industrial Goods & Services index, which gained 21%. Healthineers, whose stock has been weighed down by uncertainty over Siemens’ stake, has lost 15%.
“All three approaches have pros and cons,” said Barclays’ Sergievskii.
($1 = 0.8575 euros)
(Reporting by John Revill; Editing by Alexander Smith)
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