Siemens Said to Explore Sale of Hospital IT Business

Siemens AG is exploring a sale of its hospital database and information-technology unit to focus on energy and industrial businesses, according to two people familiar with the plans.

The German engineering company is evaluating options for the business, and no final decision has yet been made, said the people, who asked not to be identified because the considerations are private. The unit could be valued at more than 1 billion euros ($1.4 billion), said one of the people.

“The key focus here is not on cash generation via disposals, but rather the clear-out of the peripheral assets,” Natalia Mamaeva, a London-based analyst at Citigroup Inc., wrote in a note to clients.

Siemens Chief Executive Officer Joe Kaeser is already spinning off the Munich-based company’s hearing-aids unit while internally carving out all of the health-care business, which also makes medical imaging equipment and clinical diagnostic testing kits, to give it operational independence. The move will enable the division to react more readily to market demands and doesn’t precursor a divestment, he has said.

Siemens has announced divestments of 2.3 billion euros of assets since late 2012, and a hospital database and IT unit sale could boost the total to 3.3 billion euros, Citigroup’s Mamaeva estimated.

A spokesman at Siemens declined to comment on the hospital IT unit, whose systems help manage patient care.

Health Exit?

The shares rose as much as 0.2 percent and were trading 0.1 percent higher at 95.97 euros as of 9:18 a.m. in Frankfurt. The stock has declined 3.3 percent this year, valuing Siemens at 84.5 billion euros.

Kaeser is seeking to focus Siemens around “electrification, automation and digitalization,” a definition which some analysts have speculated leaves little room for the health-care division, the most profitable of Siemens’s four businesses in 2013.

The company has also been exploring a sale of its microbiology unit, which could fetch more than $300 million, people familiar with the matter told Bloomberg News in March.

Siemens divested eight businesses last year, the most of any European industrial company, according to Bloomberg Industries data. That included the spinoff of its Osram Licht AG lighting division and the sale of its stake in the Nokia Siemens Networks communications joint venture to Nokia Oyj.

The hospital information technology unit, which competes with General Electric Co., Hewlett-Packard Co. and Cerner Corp., was built up under Klaus Kleinfeld, who was CEO from 2005 to 2007 and now heads Alcoa Inc. His acquisitions included Germany’s Gesellschaft fuer Systemforschung und Dienstleistungen im Gesundheitswesen mbH, a developer of software and hardware products for processing medical and patient data.

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