Drager And Siemens Plan Joint Venture In Acute Point-of-care Solutions; Bundling Core Competencies to Further Optimize Patient Care

Business Wire, May 30, 2002

Business Editors

LUBECK & ERLANGEN, Germany--(BUSINESS WIRE)--May 30, 2002

Dragerwerk AG (Drager), headquartered in Lubeck, Germany, and Siemens Medical Solutions (Med), headquartered in Erlangen, Germany, announced the signing of a Memorandum of Understanding today to enter into a joint venture merging their worldwide activities in acute point-of-care solutions.

This will include products and services for the operating room (OR), anesthesia, critical care and emergency care, as well as products for the home care sector. The new combined company will operate with the goal of further improving the quality of care delivered to patients, while improving cost efficiencies.

Siemens will hold a 35 percent stake in Drager Medical AG & Co. KGaA. Based on the 2001 results of the contributed business, the joint venture is expected to have a total business volume of roughly EUR 1.2 billion and employ 6,400. Of these, roughly 4,800 will be from Drager Medical and some 1,600 from Siemens Medical worldwide. The merger of the worldwide activities of the two businesses is subject to regulatory approval and other customary closing conditions.

The new company, to be called "Drager Medical - A Drager and Siemens Company," will combine the activities of Drager Medical with those of Siemens Electromedical Systems division, which supplies patient monitoring, anesthesia equipment, ventilation systems and related services. The joint venture's sales organization will work closely with Siemens in developing cross-departmental solutions for hospitals and in supporting key accounts.

By combining their activities, Drager and Siemens will be better equipped to meet market and customer needs in the healthcare sector ensuring greater quality of care and cost efficiency.

Doctors, nurses and hospital administrators continue to demand products, systems and services that offer seamless workflow, help achieve optimal economic results and fulfill regulatory requirements. The joint venture's portfolio will offer customers single-source, cost-optimized and integrated solutions throughout the entire patient care process - from emergency and critical care, to the OR to home care.

The two portfolios complement one another in the sector of ventilation and anesthesia, in which both partners have decades of experience. By combining Siemens patient monitoring systems with Drager's patient data management and hospital architectural systems, the joint venture will be able to offer a complete workplace solution for effective and cost-efficient patient therapy at the acute point-of-care. In addition, the Drager Medical home care products contributed to the joint venture expanding the portfolio into the home care sector. A joint development goal for the future of this new company is to enable the seamless integration of acute point-of-care information into the hospital information technology (IT) network, an area where Siemens is a world leader.

The joint venture will have global sales and service organizations positioned in over 100 countries, as well as development and production facilities in Lubeck (Germany), Solna (Sweden), Best (Netherlands), Telford and Danvers (U.S.) and Shanghai (China).

As one of the leading providers of medical solutions, Siemens intends to improve its competitiveness in acute point-of-care solutions through the joint venture with Drager. "Part of our top program to improve profitability calls for pursuing a portfolio policy that targets a global leading market position in all of our businesses. By placing our Electromedical Systems division into a joint venture with Drager, we have the opportunity to become even more profitable in this market segment," noted Dr. Erich R. Reinhardt, member of the Managing Board of Siemens AG and president and CEO of Siemens Medical Solutions.

"The joint venture with Siemens Med promises to significantly expand our competence and to generate continuous improvement in profitability in our medical business, which is our sales leader," said Theo Drager, CEO of Dragerwerk AG.

For Dr. Wolfgang Reim, board member of Dragerwerk AG and CEO of Drager Medical, the planned cooperation is an outstanding strategic move: "We want to strengthen our leading global position in the acute point-of-care sector by offering our customers complete solutions throughout the entire patient care process. This includes, in particular, a comprehensive portfolio in patient monitoring systems and the integration of acute point-of-care information into the whole hospital IT infrastructure. Siemens is the ideal partner for the joint venture to help us achieve this goal."

Drager Medical AG & Co. KGaA (www.draeger.com) is one of the world's leading manufacturers of medical equipment. As the largest division of Dragerwerk AG, Drager Medical offers integrated systems and services throughout the entire patient care process in clinical acute care and the home care sector. Drager Medical employs around 4,800 people worldwide and is represented in over 100 countries. Over the past six years, the company continually boosted its sales by more than 10% a year, reaching a total of EUR 805 million in fiscal 2001. In the same period, the company quadrupled its EBIT from EUR 9.1 million to EUR 39.0 million. The innovative concepts of Drager Medical innovative concepts are the result of a close dialog with customers, years of experience in the market, and significant investment in R&D. The company's goal is to improve the quality of patient care while supporting cost-reduction in the health care sector.