Just a month after Dutch electronics giant Philips said it would separate its healthcare and lighting businesses, German industrial conglomerate Siemens has announced a similar strategy.
Siemens CEO Joe Kaeser announced Thursday that Siemens will spin off the company's $17 billion-a-year healthcare business as a separate legal unit, according to Qmed's sister publication European Medical Device Technology.
"As a separately managed business , healthcare will be better able to respond more efficiently to trends and to the expected paradigm shifts in the industry," Kaeser said.
Siemens is also selling its Hearing Aid Business to the Swedish private equity company EQT Partners and the investor family Strüngmann for more than EUR2.15 billion ($2.68 billion).
As in the case of Philips (not to mention Fairfield, CT-based General Electric), Siemens is another case of a huge conglomerate seeking focus on its healthcare business amid flat sales. As part of such efforts, the German multinational earlier this year announced it was selling its healthcare IT business to Cerner Corp. for $1.3 billion.
Along with headwinds from the strength of the euro, Siemens has blamed weak economic conditions in Europe, uncertainty in the healthcare market, the excise tax on medical devices in the U.S., and--as with other multinationals--slowing growth in China.
In contrast to his counterparts at Siemens and Philips, GE CEO Jeffrey Immelt remains committed to GE's healthcare business, and, following the recent sale of GE's appliance division, Immelt highlighted the importance of GE's power, energy, aviation, and healthcare business units to drive future growth.
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