German trains-to-turbines group Siemens plans a public listing of its $15-billion (12 billion pound) health care business, it said on Thursday, in a further step to focus on its core strengths of factory automation, industrial software and energy technology.

Executives signalled that Siemens would initially hold on to a majority of the business, which will need increased investments in coming years, but would not commit to how much it might want to float or when.

“We want to control it, to direct it,” Chief Executive Joe Kaeser told Bloomberg TV.

The move, which follows a carve-out of the business from the rest of the group, takes Siemens in a different direction from global rivals General Electric and Philips, who are doubling down on health care as they shed financial services and lighting respectively.

The news overshadowed a cautious outlook for the current fiscal year and a large drop in fourth-quarter orders, lifting Siemens shares 3.6 per cent to a two-month high, outperforming a 1.3 per cent rise in the German blue-chip DAX.

“Sentiment could be helped by the announced Healthcare listing,” UBS analysts wrote in a note, calling fourth-quarter profits in-line, orders weak and 2017 guidance below expectations. They kept their “neutral” recommendation.

Siemens has in past decades carried out partial listings, spin-offs, joint ventures and outright sales of its units as it exited the semiconductor, lighting, automotive and communications businesses, among others.

Siemens said it expected a modest rise of 1-2 per cent in sales in its current fiscal year to end-September, and for orders to outpace revenues, provided that the market environment for high-margin, short-cycle businesses stabilizes.

For Siemens, that means its industrial software unit Digital Factory, its most profitable unit excluding Healthineers. Oil and gas-dependent Process Industries and Drives, its other short-cycle business, was the only unit to miss its profit target in the quarter.

“Current geopolitical developments require our attention to a particularly high degree,” Kaeser told a news conference at the group’s Munich headquarters. “We continue to anticipate headwinds for macroeconomic growth and investment sentiment in our markets.”

Kaeser said, however, that the shock victory of Donald Trump in the U.S. presidential election could have a silver lining for Siemens, given Trump’s campaign promises to rebuild infrastructure and despite his anti-globalization rhetoric.

Siemens makes $22-billion or a quarter of its revenue in the United States.

“Give him a chance, let’s see what we can do together and take the positive out of it,” Kaeser said in an interview on Bloomberg TV.

For its fourth quarter, Siemens reported an 18 per cent rise in net income to €1.18-billion ($1.29-billion), in line with expectations, and flat industrial business profit of €2.45-billion that beat the average estimate of €2.41-billion in a Reuters poll.

But a 13 per cent drop in order intake to €20.3-billion – which Siemens put down to a tough comparison with the year-ago period when it won large contracts including a German wind-power deal – fell short of the €21.4-billion poll average. </s> FRANKFURT, Germany (AP) — Germany’s Siemens AG says revenue from a large power generation project in Egypt helped its fourth-quarter net profit rise by 18 percent.

The Munich-based company, which makes trains and medical scanners as well as power plants, said Thursday that its profit for the quarter ending Sept. 30 rose to 1.18 billion euros ($1.28 billion) from 1.00 billion euros in the period a year earlier.

The quarterly profit was slightly below market expectations for 1.24 billion euros.

Siemens said its power and gas division was seeing more revenue as it fulfills a large order for electricity generating facilities in Egypt. </s> Feb. 14 (UPI) — Aetna and Humana canceled their $34 billion merger agreement Tuesday after a federal judge blocked the health insurance companies’ deal on antitrust grounds.

On Jan. 23, U.S. District Judge Robert Bates ruled that the merger of the two insurers would reduce competition in the private Medicare Advantage market for seniors.

Bates halted the deal even though the two companies agreed to sell some of their Medicare Advantage business in overlapping markets to Molina Healthcare, saying Molina does not have a strong track record in Medicare.

“While we continue to believe that a combined company would create greater value for healthcare consumers through improved affordability and quality, the current environment makes it too challenging to continue pursuing the transaction,” Mark Bertolini, Aetna chairman and CEO, said in a statement. “We are disappointed to take this course of action after 19 months of planning, but both companies need to move forward with their respective strategies in order to continue to meet member expectations.”

Aetna will pay Humana a $1 billion break-up fee, which will amount to $630 million after taxes, and will terminate the deal with Molina.

The proposed merger would have created the nation’s second largest insurer with estimated operating revenue of $115 billion this year and more than 33 million customers.

Last Wednesday, Judge Amy Berman Jackson blocked a $48 billion merger between health insurers Anthem and Cigna.

Cigna or Anthem may bid for Humana, Ana Gupte, an analyst at Leerink Partners, told Bloomberg.

UnitedHealth Group is the largest health insurer in the United States in terms of revenue, according to Forbes. </s> A federal judge in Washington has blocked another giant health care merger: insurer Aetna had been hoping to buy Humana for some $37 billion. Judge John Bates found the merger would violate antitrust laws, and also sided with the government on a dicey issue involving the Affordable Care Act.

When Aetna pulled out of the Obamacare exchanges in 11 out of 15 states last summer, it said it did so purely for reasons of profitability. Documents that have come out in this case suggest Aetna was using its participation in the Obamacare exchanges as a bargaining chip with the U.S. government. Aetna said it may appeal this week’s merger decision. </s> Good Monday morning. (Want this by email? Sign up here.)

Deutsche Bank’s painful self-help plan begins

The troubled German lender unveiled its long-awaited reorganization plan yesterday, which involves eliminating thousands of jobs and severely reducing its global ambitions. But is it too little, too late?

The bank plans to cut 18,000 jobs and shrink its global equities business. Top executives will leave, including its investment banking chief, and $300 billion worth of assets will be hived off in a “bad bank” to be sold off over time. The layoffs have already begun.

The firm will refocus its efforts on serving European companies and retail-banking customers, pulling back from nearly two decades of trying to compete with Wall Street giants. But its C.E.O., Christian Sewing, said this morning that the U.S. remains a core market for the bank.

The plan will cost the lender 7.4 billion euros, or $8.3 billion, in severance payments and other expenses through 2022. Dividends will be suspended for 2019 and 2020. </s> FILE - In this May 25, 2018 file photo members of the supervisory board sit in front of the company logo during the annual shareholders meeting of German chemical giant Bayer AG in Bonn, Germany. Bayer said Thursday, Nov 29, 2018 it will cut 12 000 jobs, most of them in Germany. (AP Photo/Martin Meissner, file) (Martin Meissner) </s> WASHINGTON—A federal judge Monday blocked the proposed merger of health insurers Aetna Inc. and Humana Inc. on antitrust grounds, a potentially fatal legal blow to the $34 billion deal.

U.S. District Judge John D. Bates ruled the Justice Department had proven its case that the merger would unlawfully threaten competition. </s> German pharmaceutical giant Bayer AG says it's cutting 12,000 jobs worldwide as it seeks to reduce costs.

The Leverkusen-based company said Thursday that details of the cuts to its 118,200-stong workforce would be worked out in coming months but that "a significant number" of the reductions would come in Germany.

Bayer acquired U.S. seed and weed-killer maker Monsanto Co. this year. It says with the "synergies expected from the acquisition of Monsanto" and other efficiency and structural measures, including the job cuts, "Bayer anticipates annual contributions of 2.6 billion euros from 2022 on."

The company says a portion of the funds will be used to strengthen competitiveness and innovation in its divisions.

Bayer shares rose on the news and were up 3 percent in afternoon trading in Frankfurt. </s> NEW YORK: A US federal judge on Monday blocked Aetna's proposed US$37 billion acquisition of rival health insurer Humana, ruling the combination would stifle competition in the health sector.

US District Judge John Bates upheld the essential arguments of antitrust regulators who sued to block the deal, saying that combining two of the big five American health insurers would harm consumers.

He highlighted consumers in the "Medicare Advantage" programme for seniors, an alternative to the federal healthcare programme, and the three health exchanges in Florida set up under the Affordable Care Act.

"The Court concludes that the proposed merger is likely to substantially lessen competition," Bates said in a 158-page decision. "The proposed merger of Aetna and Humana will be enjoined."

Aetna, which would be forced to pay US$1 billion to Humana if the deal falls through, said it is considering appealing the decision.

But the decision to block the merger was applauded by US Justice Department antitrust chief Brent Snyder.

"Aetna attempted to buy a formidable rival, Humana, instead of competing independently to win customers," Snyder said in a statement. "Millions of consumers have benefited from competition between Aetna and Humana, and will continue to benefit because of today's decision to block this merger."

The decision could be a bad omen for the merger of two of the other big five American private insurers who sought to merge, Cigna and Anthem. A trial was held on the Cigna-Anthem merger with a different judge late last year, shortly before the start of the 13-day trial on Aetna-Humana.

The decision comes as President Donald Trump takes initial steps to dismantle the Affordable Care Act, also known as Obamacare. Congressional Republicans have said undoing the signature legislation of former president Barack Obama is one of their top priorities.

In afternoon trading, shares of Humana gained 1.8 per cent to US$204.15 and Aetna fell 2.8 per cent to US$119.08. Meanwhile, Anthem lost 0.5 per cent to US$149.89 while the Cigna added 0.4 per cent to US$145.38.
Siemens AG announces that it plans to spin off its US$15 billion health care division, making it its own independent company.