Siemens Healthineers shares up 7pct after $5 billion German IPO

Bloomberg

Siemens Healthineers AG shares soared in their trading debut in Frankfurt after the health-equipment company’s German parent raised 4.2 billion euros ($5.2 billion) in the country’s second-biggest initial public offering in almost two decades.
Stock in the maker of medical scanners and X-ray machines rose as much as 6.8 percent and was 5.8 percent higher at 29.63 euros on March 16, giving a market value of 30 billion euros. Trading was delayed because of a technical glitch in the market.
Investors paid 28 euros each for 150 million shares, including over-allotments. The price was in the bottom half of the range marketed by banks of 26 euros to 31 euros each. Parent Siemens AG said it plans to remain a long-term majority shareholder.
The sale of a 15 percent stake in Healthineers is a further step by Siemens Chief Executive Officer Joe Kaeser toward dismantling the conglomerate structure of Europe’s biggest engineering company. He has combined its wind power arm with a Spanish competitor and unveiled a planned merger of its rail division with a French rival. Healthineers competes head-on with General Electric Co. and Royal Dutch Philips NV in selling expensive medical equipment, far removed from the parent company’s focus on industrial automation and power generation.

Potential Value Slipped
A breakdown of investors shows 30 percent are German, 26 percent in the UK and 21 percent from the US, with about a tenth made up of retail investors, according to a document seen by Bloomberg.
The IPO is the second-biggest in Germany since 2000, trailing RWE AG’s green energy business Innogy SE in 2016, according to data compiled by Bloomberg. The potential value of Healthineers slipped from initial estimates due to market volatility and uncertainty about the success of the company’s new line of diagnostics products called Atellica.
“The nice thing about lab diagnostics is the market is growing and that means we can improve our market share,” said Michael Sen, chairman of Siemens Healthineers supervisory board, adding that he is happy with the share performance. Healthineers has pledged to capture faster growth amid a surge in health spending driven by aging populations, increased chronic diseases and greater access to care.
The Healthineers IPO comes a week before Deutsche Bank is set to sell shares in its asset management unit DWS, which is expected to raise as much as 1.8 billion euros.