Siemens Ltd agreed to sell its healthcare business for a consideration of Rs 3,050 crore, to, its German parent’s wholly owned subsidiary in India. The Siemens board is considering to distribute 50% of the sale consideration as special dividend after taking into account the applicable capital gains tax and dividend distribution tax.
The sale and transfer of its healthcare undertaking, as a going concern on a slump sale basis, to Siemens Healthcare Pvt Ltd, a wholly owned subsidiary of Siemens AG, is subject to regulatory and shareholder approvals, the company said.
The transaction, follows Siemens AG’s global strategy of managing its healthcare business under a separately managed company, giving it “entrepreneurial freedom” and “flexibility” to meet the challenges facing this industry. Over 85% of Siemens’ healthcare revenues is derived from products imported from Siemens AF and its subsidiaries.
The company statement explained that this will strengthen its focus on the healthcare segment in India, by aligning it with its global strategy and management framework and is “margin accretive” for Siemens Ltd.
The consideration for the proposed transaction was recommended by the audit committee, based on the valuation of two independent valuers – Deloitte Touche Tohmatsu and KPMG India.
In May
2014, Siemens AG had announced an internal reorganization into 9 divisions and 1 independently operated unit, Healthcare, to operate under a separate company, with an independent management team. Siemens shares ended flat in BSE, ending at Rs 1044.20, a marginal loss of about half a percent, from the previous close.