Health information technology company Cerner (NSDQ:CERN) announced this week that it won federal approval to move forward with its proposed $1.3 billion acquisition of Siemens Healthcare’s (NYSE:SI) information technology business.
Cerner is throwing down straight cash for the deal, which was rumored in July and then confirmed in August. The companies still have other regulatory obstacles to pass before closing the deal.
"We’re pleased to have cleared this important regulatory hurdle and to be one step closer to integrating Siemens Health Services and its clients into the Cerner family," Cerner senior vice president Dick Flanigan said in prepared remarks. "Our complementary client bases will span the globe in more than 30 countries, and include some of the largest health care organizations in the world."
Together the companies will command about $4.5 billion in annual revenue, with some 20,000 workers in 30 countries and 18,000 client facilities, according to a press release.
Under the terms of the deal, Cerner and Siemens AG further agreed to form a "strategic alliance" to invest up to $100 million in total to "bring new solutions to market for the purpose of enhancing workflows and enhancing clinical outcomes."
The divestiture of its healthcare IT business is part of a larger Siemens reboot, unveiled in May, that will flatten the company’s business, eliminate a layer of management and consolidate 16 divisions into 9. Siemens also said it plans to spin out its 4,000-employee hearing aid business into a public company as part of the move, dubbed "Vision 2020."