Latham & Watkins LLP advised Siemens Healthineers AG (Siemens Healthineers) on the acquisition of Varian Medical Systems, Inc. (Varian), a global leader in cancer care. Under the terms of the agreement, Siemens Healthineers will acquire all of the shares of Varian for US$177.50 per share in cash. This corresponds to a purchase price of Varian of approx. US$16.4 billion. In fiscal year 2019, Varian’s revenues had amounted to US$3.2 billion with an adjusted operating margin of approximately 17%.
The Board of Directors of Varian has unanimously approved the conclusion of the agreement and recommends to the Varian shareholders also to approve the agreement. The acquisition of Varian is expected to close in the first half of calendar year 2021, with closing being subject to the Varian shareholders’ approval, receipt of regulatory approvals and satisfaction of other customary closing conditions.
Siemens Healthineers plans to finance the acquisition of Varian with a mix of debt and equity. Siemens Finance B.V., a subsidiary of Siemens Aktiengesellschaft (Siemens AG), which controls Siemens Healthineers and is a related party within the meaning of Sect. 111a Para. 1 Sentence 2 German Stock Corporation Act (Aktiengesetz), will initially provide Siemens Healthineers with a transitional bridge facility in an amount of EUR15.2 billion to finance the acquisition price and additional costs and expenses in connection with the acquisition of Varian.
Siemens Healthineers plans to replace up to approximately 50% of the amount available under the bridge facility granted by Siemens Finance B.V. through the issuance of equity. For this purpose, Siemens Healthineers intends to increase the share capital by issuing new shares with subscription rights expected to be excluded. In a first step, Siemens Healthineers plans to place new shares without a prospectus, depending on market conditions, still within calendar year 2020. It is planned that the remaining amounts under the bridge facility will be refinanced through loans provided by Siemens AG or a subsidiary to Siemens Healthineers at arm’s lengths conditions.
Latham & Watkins represents Siemens Healthineers with a cross-border corporate M&A team led by Orange County/New York partner Charles Ruck, Munich partner Rainer Traugott, and Silicon Valley/New York partner Joshua Dubofsky, with New York partners James Gorton and Michelle Kelban and associates Saso Kraner, Leah Sauter, and Jeewon Choi, Washington, D.C. associate Margaret Elizabeth Rote, and Munich associates Stephan Hufnagel and Corinna Freudenmacher. Advice was also provided on capital markets matters by Frankfurt partners Oliver Seiler and Thomas Vogel, with associates Dr. Camilla Kehler-Weiß and David Rath; on finance matters by Munich partner Thomas Weitkamp and Frankfurt partner Alexandra Hagelüken; on health care & life sciences matters by Washington, D.C. partners Stuart Kurlander and John Manthei, and Hamburg partner Christoph Engeler; on tax matters by New York partner Lisa Watts and Munich partner Dr. Thomas Fox; on antitrust matters by Washington, D.C. partners Jason Cruise and Michael Egge with associate Seung-Wan Paik, and Brussels partners Hector Armengod and Lars Kjolbye with associates Simon Troch, Natalia Solarova, and Giuditta Caldini; on white collar defense & investigations matters by Washington, D.C. partners Leslie Carnegie and Kevin Chambers with counsel Rachel Alpert; on benefits and compensation matters by Los Angeles partner Laurence Seymour with associate Megan Ampe; on IP matters by Washington, D.C. partners Jeremiah Wolsk and Adam Perlman with associate Morgan Brubaker; and on environmental regulation & transactions matters by Washington, D.C. partner James Barrett.