Palo Alto’s Varian Medical to be taken over by Siemens’ spinoff

Varian's headquarters in the Stanford Research Park. AP file photo.

The health care spinoff of the German conglomerate Siemens announced yesterday that it is buying Palo Alto-
based Varian Medical Systems in a deal worth $16.4 billion.

The deal would create the world’s largest company specializing in radiation oncology treatments and related cancer therapy products.

Varian was founded in 1948 and was one of the first companies to locate in the Stanford Research Park. In 1999, Varian split into three companies: Varian Inc., specializing in scientific instruments; Varian Semiconductor, supplier of equipment to make computer chips; and Varian Medical Systems, which has become a world leader in the area of cancer therapy.

On Sunday, Siemens Healthineers, in which industrial conglomerate Siemens holds a majority stake, said it will buy all shares in Varian Medical Systems Inc. for $177.50 per share in cash, roughly 25% above its current market value.

It said that the acquisition is expected to close in the first half of 2021, and requires the approval of regulators and Varian shareholders. Varian’s board of directors unanimously approved the agreement, it added.

Varian had revenues in the 2019 fiscal year of $3.2 billion, Siemens Healthineers said in a statement. Varian says it employs about 10,000 people around the world.

Siemens Healthineers said it plans to finance the acquisition with a mix of debt and equity.

It plans to issue new shares this year, a move that Siemens said will reduce its stake in Erlangen, Bavaria-based Siemens Healthineers to about 72% from 85%. — From staff and wire reports