Siemens to sell 2% Healthineers stake for $1.5 billion
Siemens plans $1.5 billion sale of Healthineers stake
Siemens AG plans to raise €1.4 billion ($1.5 billion) by selling a 2.3% stake in Siemens Healthineers. The deal involves 26.5 million shares priced at €54.65 each, reflecting a 2.9% discount from the previous close.
Key Takeaways
- Siemens is selling 26.5 million shares of Siemens Healthineers, aiming to raise €1.4 billion. The shares will be priced at €54.65 each, with demand surpassing supply multiple times.
- The proceeds will be used for general corporate purposes, including funding Siemens' $10.6 billion acquisition of Altair Engineering Inc. Siemens also plans to sell a €2.5 billion stake in Siemens Energy to fund the deal.
- Siemens shares rose by 1.3%, reflecting a positive market response, while Healthineers stock declined by 2.1%.
Sale of Siemens Healthineers Stake
Siemens AG is selling a 2.3% stake in Siemens Healthineers, which equates to 26.5 million shares. The price per share has been set at €54.65, representing a discount of about 2.9% compared to the previous day's close, reports Bloomberg.
Siemens AG (SIEGY) share price dynamics (Sep 2021 - Feb 2025) Source: TradingView
This sale is part of Siemens' ongoing efforts to streamline its corporate structure and fund significant acquisitions, such as the $10.6 billion purchase of Altair Engineering.
The transaction has been oversubscribed, with demand for the shares far exceeding the amount available. This indicates that investors are eager to buy into Siemens Healthineers, despite the slight discount on the share price.
Strategic Purpose of Sale
The €1.4 billion raised from this sale will help Siemens meet its financial needs, specifically to fund its $10.6 billion acquisition of Altair Engineering. The acquisition is part of Siemens' broader strategy to strengthen its position in the software and engineering sectors.
In addition, Siemens has plans to sell a €2.5 billion stake in Siemens Energy to fund the Altair deal. This move comes after Siemens reported strong financial performance, fueled by growing demand for its high-margin software products, which has helped increase its overall market value.
Market Reaction to the Sale
Following the announcement of the stake sale, Siemens’ stock saw a positive market reaction, rising by 1.3% in early trading. Over the past year, Siemens' shares have climbed by over 30%, reflecting investor optimism around its strategy to focus on higher-margin software offerings.
In contrast, Siemens Healthineers' stock saw a decline of 2.1%, as investors typically react to such offerings by selling off shares. Despite this, the long-term outlook for both companies remains positive, with Siemens’ stock benefiting from investor confidence.
The sale of the Siemens Healthineers stake is part of a broader plan that Siemens first outlined last year, when the company signaled its intention to sell shares in Siemens Healthineers to finance its acquisition of Altair Engineering.
Siemens has made a strategic shift towards higher-margin software and digital products, which has been well-received by the market. In fact, the positive market sentiment has helped drive Siemens' stock up by 30% over the past year, and this transaction is expected to further enhance investor confidence.
Recently we wrote, that Stichting Pensioenfonds ABP, Europe’s largest pension fund, has sold its entire €571 million ($585 million) stake in Tesla Inc. during the third quarter of 2024, citing disagreement with Elon Musk’s record-breaking compensation package.
