Oxford Instruments plc announced that it has agreed to sell its 49% share of the Oxford Magnet Technology Limited (OMT) joint venture to Siemens plc for a total cash consideration of £9.1 million, representing the value of Oxford Instruments' shareholding and ongoing use of certain intellectual property. OMT manufactures superconducting magnets for the magnetic resonance imaging (MRI) bodyscanners used in hospitals throughout the world for medical diagnosis. The transaction is subject to formal approval under German competition law. The funds will be held on deposit by Oxford Instruments pending reinvestment.
In the year to 31 March 2003, Oxford Instruments' share of the pre-tax profits of OMT was £1.2 million and the balance sheet value of its 49% shareholding in OMT amounted to £1.8 million as at 31 March 2003.
As reported previously, Siemens had indicated an intent to exercise its right under the joint venture agreement to increase its shareholding when the initial 15-year term of the joint venture ended in September 2004. Following a review of the priorities for future development of their respective activities, both shareholders have decided that it is in the best interests of all parties to agree to an early termination of the joint venture, which now becomes a wholly owned subsidiary of Siemens plc.
As part of the agreement, key trading relationships between Oxford Instruments, OMT and Siemens will continue, covered by extended long-term contracts. Consequently, Oxford Instruments will continue to supply Siemens with superconducting wire, specialised field support in the USA and distribution services in Japan relating to MRI magnets, such that Siemens will remain a significant customer for Oxford Instruments. Siemens retains the right to use certain pre-existing Oxford Instruments' technology and know-how for MRI applications. Oxford Instruments retains the right to use intellectual property developed by OMT during the period of the joint venture.