·        Fresenius is a large German healthcare company founded in Bad Homburg (Hesse) in 1912 by Eduard Fresenius, its present focus on dialysis dating back to 1966. Today, the company focus on services to hospitals and inpatient/outpatient medical care.

·        For many years Fresenius and his daughter headed Fresenius Medical Care (FMC), which was considered as the darling of the German MedTech positioned on a structural growing segment: an ageing population. Despite a holding discount and a leveraged balance sheet, investors were happy to own a stock which was structurally growing.

·        After recent years of share price declines and sluggish sales growth, Fresenius finally seems ripe for the kind of corporate action that could deliver better returns. The first target seems to be the group’s handling of its prize asset, Fresenius Medical Care. For the sake of clarity, it should be noted that while listed independently on the German stock market, FMC (dialysis equipment) is effectively controlled by Fresenius Group via a 37 per cent block holding, which is why it is also reported as a division in the parent company’s annual report, despite also declaring its own set of independent accounts. The covid crisis increased costs in both businesses provoking several profit warnings and subsequently opening the way to several management changes.

·        During its Q3 2022 report session (Feb. 2022), the then chief executive Stephan Sturm announced that Fresenius wanted to publicly list both its Helios division – which owns and runs hospitals, and Vamed, which provides administrative and support services to hospitals and healthcare facilities.

·        Over the summer and after another profit warning, Fresenius CEO Stephan Sturm was replaced by Michael Sen who has a background in corporate restructuring and the CEO of FMC left the company this week due to “strategic differences”. At the same time activist hedge fund Elliott recently took a stake in Fresenius Group.

·        The appointment of Sen and the withdrawal of Kriwet opens the possibility of a more radical change than a simple pure listing proposed during the Q3 session (February 2022). A more radical change such as the straight sale of FMC would sort out the discount holding of Fresenius Group and allow management to pay back important debt maturities for 2023/2024 (around €4.5 billion). The sale of FMC would therefore close the chapiter started in 1966 allowing a deleveraged Fresenius Group to become a pure play on hospitals and remove the current holding discount in the share price.