When he joined Fresenius, former Eon and Siemens board member Sen announced that the group needed a “reset” and fundamental changes.
(Photo: IMAGO/Sven Simon)
Frankfurt Fresenius boss Michael Sen is preparing to demerge his company and the dialysis subsidiary FMC. The health company announced this on Thursday afternoon. The aim is for the mother to give up control of FMC and no longer have to fully consolidate the dialysis specialist. FMC is to be converted into a public limited company.
The Else Kröner-Fresenius Foundation, which controls Fresenius, has approved the plans, it said. However, the examination has not yet been completed and the necessary decisions by the responsible bodies are still pending. The “Wirtschaftswoche” reported about it first.
Fresenius shares rose significantly after the report. They were among the biggest Dax winners on Thursday with a plus of more than four percent. FMC, on the other hand, came under pressure and were down almost two percent.
Fresenius: Michael Sen had announced a reset of the group at the start
Investors were quick to demand clarity on the healthcare conglomerate’s course — and most importantly, a fundamental review of FMC — from Sen in December. The CEO of the dialysis subsidiary, Carla Kriwet, had previously thrown in the towel after only two months in office because of strategic differences.
The former Eon and Siemens board member Sen, who was responsible for the spin-off of parts of the company there, announced when he joined Fresenius that the group needed a “reset” and fundamental changes.
According to an insider, hedge fund Elliott, which has bought a stake in Fresenius, has been pushing Sen to take FMC off its balance sheet, for example by selling part of FMC’s shares. Although Fresenius SE & Co KGaA only holds 32 percent of the subsidiary, it has to fully consolidate it due to the balance of power in the KGaA structure. ´
The problems of the dialysis subsidiary have been burdening the balance sheet of the Dax group for a long time.
(Photo: Fresenius)
FMC had recently developed more and more into a brake pad. Above all, the lack of nursing staff in the USA slowed down the recovery after the corona pandemic. FMC – and thus also the parent company Fresenius – had to lower its profit targets for the past year several times.
“I expect a fundamental decision that FMC will be removed from the consolidation,” quoted the “Wirtschaftswoche” from the environment of the Fresenius supervisory board. “That would be a first big relief step.” The foundation is “not unopened”. Sen is also likely to force the separation from hospital service provider Vamed, the magazine reported, citing corporate and financial circles. However, Vamed has been for sale for over a year.
Sen’s predecessor was already examining the restructuring of the group structure
Investors’ expectations of Sen are high. His predecessor Stephan Sturm, who had been CFO since 2005 and CEO since 2016, had already put the complex group structure – which in addition to FMC and Vamed also includes the Helios clinic chain and the Kabi drug division – to the test.
In February last year he considered IPOs of Helios and Vamed and for the first time was also open to selling the FMC stake. But he lost the support of the supervisory board: At the end of September, Sturm had to leave early and was replaced by Kabi boss Sen.
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