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Siemens Healthineers to acquire Varian for $16.4 billion

by Gus Iversen, Editor in Chief | August 02, 2020
Business Affairs Rad Oncology
Varian's corporate headquarters in Palo Alto, California
On Sunday, Siemens Healthineers announced a blockbuster deal to acquire Varian Medical Systems, the market leader in radiotherapy technology. The deal, which will cost Siemens $16.4 billion, brings together two medical equipment companies with a long track record of collaboration.

"This decisive moment in the history of our companies means more hope and less uncertainty for patients, an even stronger partner for our customers, and for society, more effective and efficient medical care," said Bernd Montag, CEO of Siemens Healthineers, in a statement. "Together with Varian's outstanding and passionate employees, we will shape the future of healthcare more than ever before."

Based in Palo Alto, Varian is the leader in radiation oncology technology with a market share of over 50%, according to Reuters. This market, which includes cutting-edge cancer treatment technology like linear accelerators and proton therapy systems, is poised for growth as the World Health Organization's International Agency for Research on Cancer expects the prevalence of cancer to almost double between 2010 and 2030, with most cancer patients undergoing radiotherapy.

Siemens previously had a stake in the radiotherapy market but exited the business in 2011. Starting in 2012, the company entered a strategic partnership with Varian called EnVision Better Cancer Care that brought together their diagnostic and therapeutic solutions.

“Siemens Healthineers values our talented and engaged employees and recognizes the strength of the Varian brand, our cutting-edge portfolio, and the relationships we’ve nurtured," said Varian CEO, Dow Wilson. "We are thrilled to partner with Siemens Healthineers to extend our renowned customer care, serving clinicians and patients from the very first stage in the fight against cancer."

The Siemens healthcare company was spun-off from the German conglomerate in 2018, but the parent company is reportedly funding the Varian acquisition through its balance sheet, providing a bridging loan of almost $18 billion to Siemens Healthineers.

The acquisition, first reported by Bloomberg, is subject to approval by Varian shareholders and regulators, and expected to close in the first half of 2021. After closing, Varian will continue to operate under the Varian name, as a Siemens Healthineers brand.

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