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Elliott agitates Fresenius

Illustration of a saline bag solution with money as the liquid in the bag.

Illustration: Aïda Amer/Axios

Paul Singer's Elliott Investment Management took a substantial stake in kidney care giant Fresenius, Bloomberg reports.

Why it matters: Elliott's position boosts the likelihood of a break-up the German-based conglomerate, "whose structure has long been viewed as too complex and inefficient by some shareholders," Bloomberg writes.

Deal details: The size of Elliott's stake, which was not reported, has not yet exceeded the 3% disclosure threshold under German securities rules, per Bloomberg.

  • Shares of Fresenius — which had tumbled roughly 40% year-to-date prior to the news — jumped about 13% in Wednesday trading.

Catch up quick: Increasingly bulky conglomerate Fresenius has struggled in recent years, losing longtime CEO Stephan Sturm in August after cost pressures and COVID-related impacts weighed on earnings.

  • For the past half decade, shares of the company have steadily declined, seeing shares fall from a high of $57 in 2018 to a low of $14 on Thursday.
  • Michael Sen, who has led the Fresenius Kabi unit since April 2021 and was involved with corporate restructuring in prior roles at both Siemens and E.ON, this month stepped in to succeed Sturm.
  • The company comprises four units: its intravenous drug division, Kabi; hospital chain Helios; its stake in dialysis unit Fresenius Medical Care; and its stake in health care center operator Vamad.

Flashback: Just this March, Fresenius Health Partners (the parent company's U.S. unit), InterWell Health and Cricket Health joined forces to create a massive kidney care business valued at $2.4 billion.

Between the lines: Elliott, an activist fund known for its sharp cost-cutting tactics, has a history at other public behemoths, including athenahealth, Thyssenkrupp AG and software conglomerate SAP SE.

Yes, but: The firm could encounter difficulties deploying its usual playbook at Fresenius, per Bloomberg, due to special rights given to the foundation of former company leader Else Kroener, who steered the company for roughly four decades until her death in 1988.

  • The foundation has been resistant to structural overhauls of Fresenius in the past, Bloomberg reported.
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