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Fresenius launches large acquisitions – "Almost no offer on the market"

Bad Homburg (APA / dpa) – The German medical group Fresenius does not expect any major acquisitions for the time being. After the outbreak of billions bought by the American drug maker Akorn 2018, chief Stephan Sturm currently sees few opportunities for a similar deal. "This is not because of our willingness, but because of the offer," he told the German news agency and the dpa-AFX financial news agency.

After the canceled acquisition of Akorn, there are currently hardly any suitable providers on the market, Sturm said for the Fresenius General Meeting this Friday in Frankfurt. "We would therefore prefer to acquire individual medicines or smaller portfolios." But he did not want to rule out large acquisitions, Sturm emphasized. Fresenius has a majority interest in VED in Austria.

The Dax Group, which operates private clinics, sells liquid medicines such as infusions and supplies kidney patients, has also grown considerably in recent years through large acquisitions. In 2017, Fresenius bought the Spanish hospital chain Quironsalud for € 5.7 billion and a portfolio of biotech generics from Merck in Darmstadt. Fresenius recently completed the acquisition of the American medical technology group NxStage worth € 1.7 billion to capitalize on the trend towards home dialysis in kidney patients.

But the Akorn deal of € 4.4 billion had caused Fresenius to fall into turbulence in 2018. The Americans discovered manipulated drug tests; Fresenius was able to avert the acquisition in court. Moreover, the shops in hospitals and kidney patients were no longer there. Sturm had to correct its profit targets in 2018 twice within a few months – Fresenius shares were ahead with more than 40 percent.

Now it's about regaining investor confidence, Sturm said. The lowering of the forecast was "something new" for Fresenius – "and should remain something unique." He admitted dissatisfaction during the general meeting – the share price was "not well developed".

In addition to the collapse in prices, the criticism asked for Fresenius' communication policy at the time. This is very worrying for investors, complained Nicolas Huber, spokesperson for the DWS fund company. "No major loss has been withdrawn, sales and revenues are still on display," said Klaus Nieding from the DSW investor protection association. Complaints about the development of results are whining at a high level. "Only because the FC Bayern does not get the triple does it not rise equal to the 2nd Bundesliga."

After a series of record years, Fresenius 2019 declared an "investment year". Spending of € 2.5 billion is expected to bring the Group back to its former glory with more than 280,000 employees. Based on constant exchange rates, Sturm expects the consolidated net result to stagnate. The result is expected to grow strongly again in the medium term.

According to Sturm, most of the investment flows go to the dialysis subsidiary Fresenius Medical Care (FMC). It stimulates the integration of home dialysis provider NxStage and increases its capacity in the growth market of China. In addition, Fresenius is expanding production capacity in the US in the liquid medicine division of Kabi.

The lack of takeover candidates can be a problem for Kabi. An acquisition is not needed in the shiny current division, but further strengthening & # 39; highly desirable & # 39 ;, said Sturm. Fresenius is experiencing continued price pressure in the US there. "Continuous price erosion is inherent in the counter-measure," Sturm said. "Increasing the volume and building extra size are a good recipe for that."

Even in the clinic, daughter Helios storms the hand. The largest hospital operator in Germany, with 86 hospitals, suffers from fewer patients staying overnight and being treated on an outpatient basis. Fresenius has also bundled regional therapeutic fields, which irritated hospital staff. To strengthen the workforce, Fresenius wants to hire 1,000 care providers this year. 600 are involved.

The debate about higher salaries for carers sees a storm ahead. "If the compensation in health care will increase politically, we will certainly not close it. As wages rise, health insurance contributions must also rise for higher reimbursements." "We have always behaved in a tariff way and pay in line with the market."

Fresenius remains focused on acquisitions of clinics in Latin America. Fresenius meets antitrust limits in this country. Although Helios only has a market share of 6 percent on the hospital market, it is already much higher in urban areas. "Acquisitions do not play a major role in our Helios plans in Germany."

~ ISIN DE0005785604 WEB http://www.fresenius.de/ ~ APA377 2019-05-17 / 14: 49

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