Siemens Healthineers considering $8 billion sale of in vitro diagnostics unit, announces 300 layoffs

por John R. Fischer, Senior Reporter | November 06, 2023
Business Affairs
Siemens Healthineers reportedly is considering selling its in vitro diagnotics business.
Siemens Healthineers is reportedly mulling over a potential sale of its in vitro diagnostics segment that could be worth as much as $8 billion, as part of an alleged review of its diagnostics business.

Sources familiar with the matter told Bloomberg News that the company is consulting its advisors about its options for the business and that it believes a sale or carve-out of its in vitro unit, which tests blood and tissue samples to identify diseases, is likely to attract private equity firms.

If true, discussions are still in the early stages, and the company could still decide to retain the in vitro division. The review does not include its imaging division, which consists of X-ray, MR, and ultrasound equipment, reported Bloomberg News.

A Siemens Healthineers spokesperson declined Bloomberg News’ request for comment on the review.

But according to Mass Device, the company did file with the New Jersey Department of Labor & Workforce Development for the planned layoff of 300 employees at its Flanders location in Morris County, New Jersey over the next 14 months, with elimination dates starting back in March of this year and running through December 31, 2024.

The layoffs followed 67 others at its Flanders site in September and are part of consolidation plans. The Flanders layoffs then were due to the company moving the manufacturing of its Atellica Solution immunoassay module to its Swords site in Dublin, Ireland. Employees were eligible for severance and outplacement benefits, and the same goes for those in this latest round of layoffs, said a company spokesperson. They also can apply for other positions within the organization and broader group of Siemens companies.

“This decision to consolidate some manufacturing operations in Flanders does not impact other operations of the Diagnostics business area of Siemens Healthineers or of Siemens Healthineers / Siemens businesses in New Jersey," the spokesperson said.

Shares rose almost 4% for the company on Friday in early trade following news of the review and potential sale, according to Reuters.

The diagnostics unit has little overlap with the company’s other divisions but did see a 20.1% year-over-year revenue drop to $1.1 billion in Q3 due to falling demand for COVID-19 antigen tests, reported Mass Device. A divestment of any sort would add to the $248 billion worth of transactions involving healthcare companies this year, according to Bloomberg News, with the number of these deals 10% higher than they were at the same time in 2022.

The company, which is worth about €53.5 billion ($56.8 billion), has discussed reducing the complexity of its operations and simplifying its diagnostics business. It has made several innovations to its diagnostics unit over the last year, including an €80 million (over $85 million) investment in a new factory in Germany to expand CT component production.

In 2021, it acquired Varian, marking its entrance back into the radiotherapy industry in more than a decade. Earlier this year, amid growing demands, it invested €25 million (over $26 million) in a second plant at its site in Rudolstadt, Germany to manufacture electron accelerators for these solutions.

It also has an advanced therapies division that provides equipment for minimally invasive clinical procedures.

You Must Be Logged In To Post A Comment