By William Boston
This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (March 5, 2018).
BERLIN -- Siemens AG said Sunday that it would float about 15% of Siemens Healthineers AG in an initial public offering that could be worth up to $5.7 billion, making it one of the largest European stock listings in years.
The listing, which was first announced in 2016, is part of Siemens CEO Joe Kaeser's efforts to streamline the sprawling conglomerate while allowing investors to buy shares in its businesses and raising financing for expansion. The medical technology unit, which decades ago invented the X-ray machine, is seeking to strengthen its foothold in imaging equipment and to invest in new areas such as molecular diagnostics that promise faster growth.
Siemens has said that the listing of the health business is an essential first step toward enabling the company to make acquisitions, especially in the U.S., of startups that are developing new health and diagnostic technologies and services.
Siemens will begin taking offers for Healthineers stock during a bookbuilding process from March 6 to March 15. The company has set the target price for the shares in a range of EUR26 to EUR31 ($32 to $38) per ordinary share in an offer of 150 million shares, about 15% of the company's ordinary stock.
That makes the offer worth between EUR3.9 billion and EUR4.65 billion if fully subscribed.
The health-care business is one of Siemens' most profitable divisions. In the year ended Sept. 30, Healthineers reported EUR2.5 billion ($3.08 billion) in pretax profit on revenue of EUR13.8 billion, and a profit margin of 18.1%, up from 17.2% the previous year. Overall, Healthineers accounted for 17% of Siemens' revenue and 30% of the company's earnings.
Mr. Kaeser has been trying to refocus the company since becoming chief executive four years ago, shedding underperforming units such as telecommunications and household appliances and focusing on a narrower field of more-profitable businesses.
Write to William Boston at [email protected]