According to a Bloomberg report, diversified electronics goods
) is contemplating the sale of its microbiology unit. This is
part of Siemens' restructuring strategy to stop the slide in its
profitability. The move is also intended to bring into renewed
focus its core businesses, which command a significant market
share, unlike the microbiology unit that has a smaller pie of the
The microbiology unit supplies equipment for bacterial
identification and antibiotic susceptibility testing. The
division entails significant investments in R&D on a
recurring basis to remain competitive. Amid stiff competition
from other established players, such investments fail to generate
healthy ROI. Not surprisingly, the company is probably thinking
on the lines of divesting the unit altogether.
Siemens had expanded its healthcare division in 2006 and 2007
through a string of acquisitions. The company splurged about 11
billion euros in an acquisition spree by buying Diagnostic
) diagnostics unit and Dade Behring Holdings Inc.
Siemens has reportedly hired investment banks to tap the market
and seek potential buyers that could fetch anywhere between $300
million and $600 million. Even buyout financial firms like
The Blackstone Group L.P.
The Carlyle Group LP
) have joined the fray of probable bidders for the likely sale.
However, Siemens as well as Blackstone and Carlyle has refused to
comment on the issue.
Siemens Healthcare, of which the microbiology unit is a part, is
one of the leading solutions providers to the medical industry.
Its product portfolio ranges from hearing instruments, diagnostic
imaging systems, therapy equipment, and intensive care units to
clinical and administrative IT solutions
Siemens, the parent company, is a German industrial conglomerate
with interests in information services, automation and controls,
medical equipment, power generation, transportation systems,
automotive electronics, and lighting.
Siemens currently has a Zacks Rank #3 (Hold).
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