Siemens Healthineers AG (XTRA:SHL) entered into a definitive agreement to acquire Varian Medical Systems, Inc. (NYSE:VAR) from BlackRock, Inc. (NYSE:BLK), The Vanguard Group, Inc. and others for $16.3 billion on August 2, 2020. Under the terms of the transaction, Siemens will acquire all outstanding shares of Varian at a price of $177.5 per share in cash. Payment of the purchase price is to be enabled by mixed financing from the issuance of new Siemens' shares and the issuance of bonds. Siemens AG (parent of Siemens Healthineers) will not participate in the planned equity increase at Siemens Healthineers. The additional debt capital is to be borrowed externally by Siemens AG in the form of bonds and transferred to Siemens Healthineers via intra-Group loans under customary market conditions. Siemens Finance B.V., a subsidiary of Siemens Aktiengesellschaft will initially provide Siemens Healthineers with a transitional bridge facility in an amount of €15.2 billion ($17.98 billion) to finance the acquisition price and additional costs and expenses in connection with the acquisition of Varian. As of September 2, 2020, Siemens Healthineers AG raised €2.73 billion ($3.23 billion) in a placing with institutional investors. The cash thus raised will be used to fund part of the transaction with Varian. Varian expects to continue to operate as an independent company under the Varian name following the completion of the transaction. Upon termination of the agreement, a termination fee of $450 million will be payable by Varian to Siemens and a reverse termination fee of $925 million will be payable by Siemens to Varian.

Varian employees' role and responsibilities are continuing as usual and there is no expected near-term changes as a result of this announcement. In case of any employee termination due to merger, compensation would be provided. As of March 2, 2021, Chief Executive Officer Dow Wilson, will retire upon the successful completion of the transaction. Dow Wilson will be succeeded by Chris Toth, President and Chief Operating Officer of Varian, who will become Chief Executive Officer of the Varian business segment of Siemens Healthineers upon the transaction close. Chris Toth will report directly to Bernd Montag, Chief Executive Officer of Siemens Healthineers. Dow Wilson has agreed to serve as a special advisor to Siemens Healthineers.

The transaction is subject to approval by Varian's shareholders, receipt of regulatory approvals, expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, receipt of the approval of the Committee on Foreign Investment in the United States (CFIUS) and other customary closing conditions. The transaction is subjected to the satisfaction or waiver of the other conditions to closing. The transaction has been unanimously approved by Varian's Board of Directors and Varian's Board of Directors recommended to Varian's shareholders to approve the agreement. The consummation of the merger is not subject to any financing conditions. As of October 15, 2020, Varian stockholders have voted to approve the transaction at a special meeting. As of October 22, 2020, the HSR waiting period expired pursuant to the transaction. As of November 23, 2020, Varian received CFIUS Approval. As of February 10, 2021, the Competition Commission of India has approved the transaction. On February 19, 2021 Siemens announces that the European Commission concluded its review of the planned merger with Varian Medical and approved the transaction subject to certain conditions. As of April 8, 2021, China's antitrust authority has cleared the deal. The transaction is expected to close in the first half of calendar year 2021. Varian expects the transaction to be accretive to adjusted basic earnings per share of Siemens within the first 12 months after closing of the acquisition. Siemens aims for EBIT synergies after the closing of the acquisition of at least €300 million ($353.3 million) per annum in fiscal year 2025.

Goldman Sachs & Co. LLC acted as financial advisor and fairness opinion provider; Claire Jeffs of Slaughter and May; and David C. Karp, Ronald Chen and Viktor Sapezhnikov of Wachtell, Lipton, Rosen & Katz acted as legal advisors to Varian. Charles Ruck, Rainer Traugott, Joshua Dubofsky, James Gorton, Michelle Kelban, Oliver Seiler, Thomas Vogel, Thomas Weitkamp, Alexandra Hagelüken, Stuart Kurlander, John Manthei, Christoph Engeler, Lisa Watts, Thomas Fox, Jason Cruise, Michael Egge, Hector Armengod, Lars Kjolbye, Leslie Carnegie, Kevin Chambers, Rachel Alpert, Laurence Seymour, Jeremiah Wolsk, Adam Perlman and James Barrett of Latham & Watkins LLP acted as legal advisor to Siemens. JPMorgan Chase & Co. acted as financial advisor, underwriter of acquisition financing and sole foreign exchange risk hedging provider to Siemens. UBS Investment Bank acted as financial advisor to Siemens. Bettina Steinhauer of Clifford Chance Partnerschaftsgesellschaft acted as legal advisor to Siemens. Goldman Sachs & Co. LLC will be paid a fee of approximately $77 million, all of which is contingent upon consummation of the merger. Georgeson LLC acted as the information agent to Varian and will be paid a fee of approximately $9,500 for the services rendered. Hengeler Mueller Partnerschaft von Rechtsanwälten mbB acted as legal advisor to Varian.

Siemens Healthineers AG (XTRA:SHL) completed the acquisition of Varian Medical Systems, Inc. (NYSE:VAR) from BlackRock, Inc. (NYSE:BLK), The Vanguard Group, Inc. and others on April 15, 2021.