MUNICH (Reuters) - Siemens plans to list its 40 billion euro ($48 billion) healthcare unit Healthineers in March, two people close to the matter said, as the group hopes to execute the deal while market conditions are favorable.
The Frankfurt listing of a minority stake in Healthineers, which makes X-ray and MRI machines, is expected to be Germany’s biggest IPO this year. It is likely to be announced in the first few days of March, with an initial public offering taking place four weeks later, the sources said.
Siemens, which is expected to sell 15-25 percent of Healthineers, declined to comment.
World stock markets are close to all-time highs with the combination of solid global growth and low inflation powering the appetite for risk, but some investors worry the rally may be nearing an end.
“Companies with IPO plans are now trying to get out of the door fast to avoid missing the opportunity in the event of a market correction,” an equity capital markets banker said.
The German 2018 IPO pipeline looks strong after a lacklustre 2017, when the country saw only 11 IPOs with total proceeds of 2.7 billion euros, pushing Germany’s share of European IPOs down to 6 percent from 16 percent a year earlier.
If markets hold, Healthineers will be one of a number of blockbuster flotations in Germany this year.
Healthineers’ listing is aimed at enabling it to raise its own funds for takeovers and investments in the healthcare sector as well as crystallizing its standalone value, removing some of the “conglomerate discount” that weighs on Siemens’ valuation.
But Healthineers will be vying for investor attention with the IPO of brake systems maker Knorr-Bremse, which is seen worth 13-15 billion euros and Deutsche Bank’s asset management arm DWS, whose listing could value the unit at 8 billion euros.
SpringerNature, the publisher of science magazines Nature and Scientific American and estimated to be worth 4 billion-5 billion euros, is working on a stock market listing too, while German home shopping TV network HSE24 is targeting an IPO that could value it at 1.5 billion euros.
Smaller IPOs such as those of non-prescription drugmaker Dermapharm, machine tool maker United Grinding Group, residential property developer Instone and caravan maker Knaus Tabbert are also in the works.
Siemens aims to discuss its plans for Healthineers at a capital markets day on Jan. 16. That will be followed by a separate presentation to analysts tasked with calculating a company valuation several weeks ahead of the official announcement of the IPO.
Chief Executive Joe Kaeser said late last year that Siemens was testing the appetite of sovereign wealth funds ahead of Healthineers IPO, possibly to secure anchor investors for the flotation.
Reporting by Alexander Hübner and Arno Schuetze; Editing by Christoph Steitz and Susan Fenton