Siemens Ltd mulls merger with group company

Siemens Ltd mulls merger with group company

Mumbai: Siemens Ltd, the Indian subsidiary of the German engineering and electronics conglomerate Siemens AG, is considering a proposal to merge another group company Siemens Healthcare Diagnostics Ltd with itself.

Siemens Healthcare Diagnostics is a subsidiary of Siemens group company, Siemens Diagnostics Holdings of Netherlands.

The company is engaged in the business of diagnostics equipment such as scanners, X-ray and other imaging systems in the world market, including India.

Siemens Healthcare Diagnostics posted a net profit of Rs5.3 crore on sales of Rs165.36 crore in the year 2008-09. The company posted a net loss of Rs2.21 crore in the previous year.

Siemens has informed the stock exchanges that its board will take a decision on the proposal at its meeting scheduled for 30 November.

Siemens Ltd, which posted a net profit of Rs692 crore on sales of Rs9,349 crore in the financial year ended 30 September, also operates a healthcare equipment and technology division in India.

Though both these companies are currently present in the Indian healthcare market, their products don’t compete each other. Siemens Ltd, in its note to stock exchanges, has not mentioned the reason for the merger.

A sector analyst, who didn’t want to be identified, said the move would create better synergies for both the companies as they can leverage the customer base that they haveat present in the Indian healthcare and diagnostics market.

A Siemens Ltd spokesperson didn’t elaborate beyond saying that a decision is going to be taken at the board meeting to discuss the proposal.

Siemens Health shares rose 2.06% to close at Rs1,315.15 on Bombay Stock Exchange on Thursday.