GERMANY — Siemens Healthineers is reportedly exploring the possibility of selling its in vitro diagnostics segment, a transaction that could reach a substantial US$8 billion.
This development is said to be part of a comprehensive review of the company’s diagnostics business, according to sources familiar with the matter as reported by Bloomberg News.
The company is said to be actively consulting its advisors to weigh the options for this segment, with a strong belief that a sale or carve-out of the in vitro unit—specializing in testing blood and tissue samples for disease identification—would likely attract private equity firms.
However, these discussions are still in their early stages, and Siemens Healthineers may ultimately decide to retain the in vitro division.
Importantly, the ongoing review excludes Siemens Healthineers’ imaging division, encompassing X-ray, MR, and ultrasound equipment, as highlighted by Bloomberg News.
Siemens Healthineers has maintained a tight-lipped stance on the matter, with a company spokesperson declining to comment on the ongoing review.
Nevertheless, recent actions, such as filing for the planned layoff of 300 employees at its Flanders location in New Jersey, hint at operational adjustments.
According to Mass Device, these layoffs are part of consolidation plans and follow a previous round of 67 layoffs in September.
The earlier layoffs were attributed to the company’s strategic decision to relocate the manufacturing of its Atellica Solution immunoassay module to its Swords site in Dublin, Ireland.
The spokesperson assured that the consolidation in Flanders would not impact other operations within the Diagnostics business area of Siemens Healthineers or the broader group of Siemens companies in New Jersey.
Employees affected by the layoffs are eligible for severance, outplacement benefits, and have the opportunity to apply for other positions within the organization.
News of the potential sale had a positive impact on Siemens Healthineers’ shares, which rose nearly 4% in early trade following the announcement, as reported by Reuters.
Diagnostics unit performance and strategic investments
Siemens Healthineers’ diagnostics unit faced a 20.1% year-over-year revenue drop to US$1.1 billion in the third quarter, primarily attributed to declining demand for COVID-19 antigen tests.
Any form of divestment from this unit would contribute to the growing trend of significant transactions in the healthcare sector, reaching a staggering US$248 billion this year, a 10% increase compared to the same period in 2022, according to Bloomberg News.
The company, valued at about €53.5 billion (US$56.8 billion), has been actively working to streamline its operations and simplify its diagnostics business.
Over the past year, Siemens Healthineers has made notable investments, including an €80 million (over US$85 million) commitment to a new factory in Germany, focusing on expanding CT component production.
In 2021, the company reentered the radiotherapy industry by acquiring Varian. Responding to increased demands, Siemens Healthineers invested €25 million (over US$26 million) in a second plant at its site in Rudolstadt, Germany, dedicated to manufacturing electron accelerators for advanced therapies.
The company’s diversified portfolio also includes an advanced therapies division, providing equipment for minimally invasive clinical procedures.