The oft-discussed minority stake IPO of Euro 47B valued Siemens Healthineers on the Frankfurt exchange has been dragging on for some time, with more questions than answers until late 2017, when a final date of March 2018 was announced. The reasoning behind the spin-off seemed relatively sound at the time; raising capital from one of Siemens most stable and profitable business units, while also “freeing” the Healthineers business unit from the complex industrial conglomerate, to increase opportunity and flexibility for future partnerships.

However, the latest announcement of almost Euro 240m of cost-cutting initiatives per year, to be realised in 2020 , raises a few questions. At face-value, this may be a signal to potential stakeholders in the IPO that Siemens is serious (and willing to make some painful decisions) about making Germany’s largest IPO in 20 years a success. If much of the cost-cutting comes from the “de-coupling” from the Siemens conglomerate, then this would seem straightforward. Yet, with Siemens AG remaining a majority stakeholder in the new public company, it would be surprising if this was the complete story. Instead, it may be that Siemens is also using the IPO as an opportunity for some significant “housekeeping” and refinement of its own portfolio.

Perhaps most concerning is the lack of clarity around future target markets; Siemens Healthineers has technically excelled in certain markets for some time, such as big iron imaging modalities and advanced radiology, yet has done little to fill in the gaps in its portfolio, such as clinical care, non-radiology health informatics, and digital pathology. If all the IPO provides is more capital for Siemens AG and a slightly leaner, more profitable Siemens Healthineers, one could argue that an opportunity to really challenge GE and Philips as a dominant force in diagnostic and clinical IT has been missed.
Canon Medical Systems: At Risk of Missing the Age of Informatics
Canon’s acquisition of Toshiba Medical Systems has been playing out for some time. The latest development for the two firms signalled the cohesive start of their new venture, globally re-branding under Canon Medical Systems. However, the work for the new Canon Medical Systems business is only just starting. While the acquisition was a good one for both parties, given the complementary nature of their portfolios in medical imaging, lingering concerns still exist.

Firstly, as with many Japanese industrial conglomerates, apparent cohesiveness between business units and regional teams is rarely the case. Toshiba already had some issues of its own, with a “house of brands” approach to subsidiaries such as Vital Images and Olea Medical. Canon also had a similar approach, with regional subsidiaries often operating independently (e.g. DelftDI) and with little cohesive marketing or branding. While the re-brand goes some way to solving this (though for some reason the Vital Images and Olea Medical brands remain) the new venture will need to quickly “bed-in” with core messaging, marketing and sales operations, especially given the increasingly “single-vendor” focus of healthcare providers when it comes to tendering and procurement.

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