FMC shareholders give the green light to separate from Fresenius

2023-07-14 17:06:09

The way is clear for the separation of the dialysis specialist Fresenius Medical Care (FMC) from the parent company Fresenius. FMC shareholders gave the go-ahead for the conversion from a partnership limited by shares (KGaA) to a stock corporation (AG) at an extraordinary general meeting on Friday. 99.88 percent voted for the new legal form, which means that the healthcare group no longer has to account for the subsidiary in full. 75 percent would have been necessary. The conversion should be completed by the end of the year at the latest. Fresenius CEO Michael Sen said Fresenius will remain FMC’s largest shareholder.

With the step, FMC will get a “simpler, better and more agile corporate structure”, CEO Helen Giza once again advertised. The company gets better access to the capital markets, the rights of the shareholders are strengthened. “We have looked extensively at possible alternatives to conversion and carefully weighed their advantages and disadvantages. There are no alternatives that serve the interests of the company and its shareholders in a comparable way.” However, the conversion initially costs money: Giza expects up to 100 million euros in one-off costs.

Concentration on medicines division and clinic chain Helios

Although Fresenius only holds 32 percent of the subsidiary, it has to fully consolidate it because of the balance of power in the KGaA structure. But FMC had increasingly developed into a brake pad for the group. 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 – had to cut back on the goals several times. After the conversion, the FMC profits and losses are only included in Fresenius’ results on a pro rata basis. The group intends to focus on the Kabi drug division and the Helios clinic chain in the future. The service division Vamed, which is struggling with many problems, should only be managed as a financial investment, like FMC.

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The shareholders approved the conversion. Klaus Nieding from the German Association for the Protection of Securities (DSW) spoke of a step that was overdue. The shareholders’ association has always been critical of the KGaA. The Deutsche Bank fund company DWS, which is one of the 15 largest investors, also made a positive statement. “The change of legal form is considered a fundamental step towards reducing the overall complexity in the group of companies in the long term,” said their corporate governance expert Hendrik Schmidt.