FRANKFURT Siemens (SIEGn.DE) would consider merging its $15 billion healthcare business with a listed competitor as an alternative to a flotation, its finance chief said, adding that the German industrial group would not be rushed into a decision.
The trains-to-turbines group announced in November it planned to list the medical technology business, enabling it to raise its own funds to adapt to new trends such as genome analysis, personal health management or software and services.
But it has not yet mandated any banks, several sources have told Reuters, raising questions as to whether it will manage a listing of Healthineers this year, as had been expected.
On a conference call following the release of forecast-beating Siemens quarterly results, CFO Ralf Thomas said the German company had never set itself a deadline and was considering "two or three" options for a listing.
Siemens has plenty of experience on which to draw.
It could sell new shares in a classic initial public offering as it did with chipmaker Infineon (IFXGn.DE), spin off the business to existing shareholders as it did with lighting unit Osram (OSRn.DE), or merge the business with an already-listed company, as it did in the case of its wind-power business with Spanish renewables group Gamesa (GAM.MC).
Asked whether Healthineers could be merged with a listed company, Thomas told reporters: "Of course we're looking at all the options that are theoretically possible... I wouldn't really exclude anything."
Thomas did not spell out the options, saying that to do so could prejudice the outcome if another party were involved. "Some of these options may not be under our full control," he told analysts.
He stressed that Siemens' wind power deal with Gamesa should not be seen as a blueprint.
Two bankers familiar with Siemens mentioned U.S. medical device maker Varian Medical Systems (VAR.N), a company with less than a quarter of the sales of Healthineers, as a potential partner that Siemens has looked at in the past.
California-based Varian did not immediately respond to a request for comment.
Another banker said it would make little sense for Siemens Healthineers to engage in such a reverse IPO with a large hardware company - an area where it is already strong - but that it needed to deploy money into its software offering, either by investing in people or by buying small peers.
Healthineers, whose core business is in large medical imaging equipment, was the only one of Siemens' businesses not to beat market expectations for profit in the group's fiscal second quarter to the end of March.
Its profit rose 6 percent to 588 million euros ($643 million) but missed the poll average of 620 million euros, following a 15 percent year-on-year jump in the first quarter.
"It's obvious that after a really strong quarter... you cannot necessarily keep that level of pace," Thomas said. "I believe the momentum is going to pick up again," he added, citing China as a driver.
Overall, Siemens beat market forecasts with a 1 percent rise in orders, 5 percent increase in revenue and 18 percent rise in industrial profit in the quarter, taking its industrial margin to 12.1 percent.
Siemens reiterated its forecasts for the full year to end-September, saying they remained nominally the same but now took in their stride the costs of integrating Mentor Graphics and getting Siemens Gamesa Renewable Energy off the ground.
It expects a modest rise in revenue, higher orders than sales, an 11-12 percent industrial profit margin and a rise in earnings per share to 7.20-7.70 euros compared with 6.74 euros in fiscal 2016.
Siemens shares rose 0.3 percent to 132.85 euros by 1225 GMT, broadly in line with the wider market.
(Additional reporting by Arno Schuetze and Alexander Huebner, and Joern Poltz in Munich; Editing by Maria Sheahan/Keith Weir)