Siemens has fixed the merger ratio for two of its listed companies in India-- Siemens Healthcare Diagnostics Ltd with Siemens Ltd, the flagship group firm in India. Shareholders of Siemens Healthcare will get two shares of Siemens for every one share held by them in the healthcare equipment firm.
Siemens Group, through more than a dozen entities in India, has revenues of around Rs 12,000 crore, three-fourths of which come from the flagship company Siemens Ltd.
Siemens Healthcare is into medical equipment business and focuses on immuno-diagnostics and clinical chemistry business. It competes with global giants like GE and Philips in medical equipment space besides some domestic niche players. For the nine months ended June’09, Siemens Healthcare had top line of Rs 122 crore with net profit of around Rs 7.6 crore.
Deloitte Touche Tohmatsu and ICICI Securities Limited were the independent valuers for the deal. The proposed merger is subject to requisite approvals.
Apparently, the market was expecting better merger ratio for shareholders of the healthcare wing and as a result the stock price of Siemens Healthcare dropped 5% while that of Siemens gained 1.4% in line with overall movement of Sensex. It is to be seen whether this merger also faces opposition from minority shareholders.
Siemens had early this year faced investor ire when it decided to sell its IT business- that was part of Siemens Ltd- to the German parent. Minority shareholders had raised objections to the value at which the deal was struck and claimed that if the sale was made to an outsider it could have fetched more money for the company as against selling to its own parent. Grant Thornton was the valuer to that deal.
Siemens has been on a consolidation drive. Last week, it also approved the acquisition of the balance 13.85% stake in Siemens Building Technologies Pvt. Ltd., Chennai (SBTPL) from certain individual shareholders at a consideration of Rs 70.2 crore. With this deal, SBTPL would become a wholly owned subsidiary of Siemens to be subsequently merged with the flagship company in India.