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Siemens plans Healthineers IPO in first half of 2018

Siemens plans Healthineers IPO in first half of 2018
August 3, 2017

FRANKFURT (Reuters) - German industrial group Siemens said its long-awaited healthcare unit listing would come only next year and posted third-quarter results on Thursday that were dragged down by its energy-related businesses.

Siemens said the market debut of Healthineers, expected to value the business at up to 40 billion euros ($47 billion), would take place in the first half of 2018 in the form of an initial public offering.

Investors have been wondering about Siemens' plans for the business since Chief Executive Joe Kaeser announced last November he planned some kind of listing - causing excitement in the market - but gave no details.

The trains-to-turbines group wants Healthineers to have its own currency for acquisitions and investments as the global healthcare market shifts focus from Siemens' core business of imaging to molecular diagnosis and patient self-management.

Siemens' third-quarter results as a whole missed expectations, with profit from its industrial businesses of 2.25 billion euros versus a Reuters poll average of 2.41 billion, orders down 9 percent and sales up 3 percent.

Shares in the Munich-based group, which hit a six-month low this week, were indicated 1.3 percent lower ahead of the Frankfurt market open.

"Siemens reported Q3 16/17 below consensus... and delayed healthcare IPO to 2018," a Frankfurt-based trader wrote in a note, adding that he expected a negative effect on shares.

Siemens also said its supervisory board had extended the contract of Kaeser ahead of time until the company's 2021 annual shareholder meeting. It had been due to run out next year.

Kaeser, a former Siemens finance chief who seized power in a boardroom coup in 2013, is popular with investors for eliminating the nasty surprises that used to plague the group and slimming down its portfolio.

Healthineers was the biggest contributor to Siemens' third-quarter profit, with a 9 percent increase to 579 million euros ($686 million), in line with expectations, and a 2 percent rise in orders.

The Power and Gas unit, which is suffering from a global trend away from the large turbines in which Siemens specialises, reported a 41 percent drop in orders and a worse-than-expected 23 percent fall in profit.

Digital Factory, the automation software unit that is Siemens' second-biggest profit driver, reported an 18 percent rise in orders and a 23 percent increase in profit, beating market expectations.