Please ensure Javascript is enabled for purposes of website accessibility

Why Varian Medical Systems Stock Surged Today

By Joe Tenebruso – Aug 3, 2020 at 3:19PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

A new force is emerging in cancer care.

What happened

Shares of Varian Medical Systems (VAR) jumped more than 20% on Monday after the cancer treatment specialist said it struck a deal to be acquired by Siemens Healthineers (SMMNY 7.89%) for $16.4 billion. 

So what 

The all-cash transaction would see Siemens Healthineers acquire all of Varian's outstanding stock for $177.50 per share, or roughly 24% higher than Varian's closing price on July 31.

Two people shaking hands

Varian's stock rose sharply on news of its merger with Siemens Healthineers. Image source: Getty Images.

The deal would create a powerful force in the healthcare industry, with offerings spanning diagnostics, radiotherapy, and data analytics. "Siemens Healthineers' innovative leadership in detection and diagnosis will extend our ability to serve clinicians and patients from the very first stage in the fight against cancer," Varia CEO Dow Wilson said in a press release. "And, we will be positioned to transform care for a greater number of patients worldwide." 

Now what 

The merger is expected to close in the first half of 2021, subject to regulatory and shareholder approval.

Wilson believes the combined company -- thanks in part to its use of advanced technologies such as artificial intelligence and machine learning -- will help to digitally transform oncology care. "In addition to delivering immediate and compelling value to our shareholders, the combination with Siemens Healthineers brings us even closer to realizing our transformative vision of a world without fear of cancer," Wilson said.

Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.