I don't think anybody will accuse Siemens Healthineers (OTCPK:SMMNY) (SHLG.XE) ("SHLG") of "half measures". Management of this large European healthcare company decided to address one of the major end-market gaps in the business (oncology treatment) in a big way, announcing a $16.4 billion cash deal for Varian (VAR), the global leader in radiation oncology systems.
Although some of the valuation multiples on the deal do in fact look quite robust, the deal really isn't that expensive when you consider Varian's superior growth rate, margins, and market share position in the radiation oncology space, not to mention the potential cost and revenue synergies. I see only a token risk that this deal does not go through, though I do think Siemens Healthineers' synergy expectations for the first 12-24 months could be a little ambitious, and I believe this is a good deal over the long term for SHLG shareholders.
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