By Ludwig Burger
FRANKFURT (Reuters) - German healthcare group Fresenius SE (ETR:FREG) said on Thursday it was potentially ready to cede control over Fresenius Medical Care (FMC), after a fall in earnings at the world's largest dialysis company.
Shares in FMC were down 3.4% at 1538 GMT, while Fresenius stock surged 4.3% after it said it was considering de-consolidating the subsidiary, meaning its sales would no longer be fully integrated into its financial reports.
Elliott Investment Management took a stake in Fresenius SE in October, a person familiar with the matter told Reuters at the time, sparking speculation the activist investor might push for a break up of the diversified healthcare company.
FMC, which has been hit hard by U.S. staff shortages and cost inflation this year, slashed its annual outlook twice last year, also pulling down Fresenius' forecasts.
Confirming an earlier report by business magazine WirtschaftsWoche, Fresenius said in a statement that it was also looking into abandoning FMC's legal form of AG & Co. KGaA, which gives it strategic control and the right to appoint leadership positions even though it only holds 32% of the capital.
Other FMC investors currently have little say in how it is run and the possible change to a regular stock corporation would normally grant all shareholders equal voting rights.
Fresenius cautioned, however, "that the analysis is not yet completed and the required decisions by the competent bodies within the group are still outstanding".
The Else Kroener-Fresenius-Stiftung, a charitable trust that controls Fresenius SE, "has taken note with approval of" the plans to deconsolidate FMC and to change its legal form.
Michael Sen, who became Fresenius CEO in October, has embarked on what he calls a "top-to-bottom" review of all its business activities, with a focus on profitability.
FMC Chief Executive Carla Kriwet, who was hired by Sen's predecessor, stepped down in December after just two months in the job, citing "strategic differences".