Siemens to Acquire Varian in One of the Largest Deals During the Pandemic

Siemens Healthineers said it would acquire Varian Medical Systems for $16.4 billion. The deal would give Erlangen, Germany-based Siemens Healthineers a greater runway into cancer care.

Omar Ford

August 3, 2020

3 Min Read

Siemens Healthineers is acquiring Varian for $16.4 billion in perhaps one of the largest medtech deals in the pandemic era to date. The merger would give Erlangen, Germany -based Siemens Healthineers a broader reach into cancer care.

The all-cash transaction is set to close in the first half of 2021. Siemens would pick up all Varian shares for $177.50 each in cash. This represents a 24% premium to Palo Alto, CA-based Varian’s closing price on Friday.

"Today's announcement represents an important milestone in our company's history, and our Board is confident that this is the right path forward for Varian," Dow Wilson, President and CEO of Varian, said in a release. "In addition to delivering immediate and compelling value to our shareholders, the combination with Siemens Healthineers brings us even closer to realizing our transformative vision of a world without fear of cancer. Siemens Healthineers' innovative leadership in detection and diagnosis will extend our ability to serve clinicians and patients from the very first stage in the fight against cancer. And, we will be positioned to transform care for a greater number of patients worldwide."

The deal comes on the heels of Siemens Healthineers announcing it was developing the Fast Track Diagnostics SARS-COV-2 assay. The company inherited the COVID-19 assay when it acquired Luxembourg-based Fast Track Diagnostics in December of 2017.

Marie Thibault, a medtech analyst at BTIG and a former managing editor at MD+DI, wrote in a research note that Varian and Siemens already had a mutual marketing and development relationship dating back to 2012

“While unexpected — we viewed Varian as a routine acquirer but did not think the company was a likely near-term acquisition target — we do think the transaction makes sense given the two companies’ product portfolios and existing collaboration,” Thibault wrote in a research note. Although [Siemens Healthineers] exited its linear accelerator business at the end of 2011, Varian business has shifted considerably in recent years, with service and software adding growth and more favorable margins vs the legacy hardware business. Siemens believes adding Varian’s capabilities and products will allow it to address the issue of fragmented cancer care by enabling earlier diagnosis and precise, targeted therapies powered by artificial intelligence.”

Shares of VAR (NYSE) were up about 22% on Monday.

The Life and Times of Medtech Deals During the Pandemic

Despite the uncertainty in the markets, there have been some sizeable deals during the pandemic and some have stalled.  

MD+DI recently compiled a list of four deals that were stopped by COVID-19 and four that continued, despite the virus.

Invitae made a move to acquire ArcherDx, a genomic analysis in a deal valued at $1.4 billion in June.  However, just as there have been some successful announcements of deals some have also stalled.

Talks of a merger between Thermo Fisher Scientific and Qiagen recently came to a halt (again). The deal has roots stretching back into 2019. The then $11.5 billion deal was officially announced in March.

A few weeks back, Waltham, MA-based Thermo Fisher Scientific boosted its offer to acquire Qiagen by about $1 billion. The move came a few days after a hedge fund with a stake in Qiagen pushed for a better offer.


About the Author(s)

Omar Ford

Omar Ford is MD+DI's Editor-in-Chief. You can reach him at [email protected].


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