Siemens chief refutes divestiture rumors

August 6, 1997

The chief executive of German industrial conglomerate Siemens AG last month stated emphatically that the company's Medical Engineering Group is not for sale. While Medical Engineering finished the first six months of the year in the red, due to a massive

The chief executive of German industrial conglomerate Siemens AG last month stated emphatically that the company's Medical Engineering Group is not for sale. While Medical Engineering finished the first six months of the year in the red, due to a massive restructuring program, Siemens president and CEO Heinrich Pierer said the division is not for sale.

Pierer's comments came with the release of Siemens revenue and earnings figures for the first half of 1997 (end-June). For the year to date, Medical Engineering recorded sales of 5.1 billion deutschmarks ($2.78 billion), up 2% compared with revenues of 5 billion DM ($2.72 billion) in the same period the year before. Siemens did not report the size of the loss at the division.

In statements accompanying the results, Pierer said that Siemens will not divest the Medical Engineering Group, although it is restructuring the business and is examining some of the operations in its portfolio, such as a dental unit in the group, that it intends to sell (SCAN 5/14/97). The moves may have sparked rumors that surfaced in the European press earlier this year that Siemens was looking to divest Medical Engineering. Nothing could be further from the truth, Pierer reiterated.

"Our Medical Engineering Group is not for sale," Pierer said. "It is an indispensable part of our core businesses. When we talk about adjusting portfolios in this or any other operating group-in this case the dental business-our goal is to optimize the entire group and is by no means a first step toward divestment."