By Eyk Henning
Germany's Siemens AG (SI) is considering reviving its effort to
sell its hearing aid unit later this year, as part of a larger
disposal program aimed at cleaning up the industrial conglomerate's
portfolio of operations.
Munich-based Siemens could start another sales process for the
unit, valued at around EUR2 billion, as early as in the second half
of the year, two people familiar with the talks said. One of the
people suggested that private equity companies could be interested
in the unit given good conditions on debt financing markets and the
scarcity of other potential targets.
A Siemens spokesman declined to comment on the information.
Siemens halted a first attempt to sell its hearing aid unit in
early 2010 as operating performance worsened during the process. As
a result bidders were only willing to submit binding offers of
around EUR1.6 billion, after initially offering over EUR2 billion.
Among the parties interested at that time were a consortium made up
of financial investors Permira and Nordic Capital, as well as a
consortium comprising of Australian implant maker Cochlear Ltd.,
which teamed up with Hellman & Friedman. Kohlberg Kravis
Roberts & Co., Cinven Group and Bain Capital were also said to
be looking at the asset at that time.
Following the flop, Siemens invested heavily in the unit to ramp
up the product range and improve their quality.
The global hearing aid devices market was valued at $7.2 billion
in 2011 and is forecasted to grow to $11.3 billion by 2018 at an
annual growth rate of 7%, according to a recent report published by
the firm researchandmarkets.
The global market for hearing aids is largely split up between a
few companies. According to analysts, the top six players--Sonova
Holding, William Demant Holding, Siemens and GN Store Nord's
ReSound, Starkey and Widex--control the bulk of the global market,
meaning consolidation between them would likely be scrutinized by
antitrust authorities.
For Siemens, the disposal of the hearing aid business would mark
the exit from B2C activities, after the intended spin-off of its
lighting unit Osram scheduled for late April at the earliest.
A sale of the hearing aid unit would also add to the string of
asset disposals worth several billion euros Siemens recently
announced. The company has mandated banks to sell four of its
operations, namely its Water Technologies unit, postal automation
and baggage handling businesses, the security products arm as well
as its solar unit, several people familiar with the matter have
said.
Siemens may also strike a deal exiting the network-equipment
joint venture Nokia Siemens Networks after the shareholder pact
with the Finnish partner expires in April, these people added.
Write to Eyk Henning at eyk.henning@dowjones.com, (Ursula Quass
contributed to the report.)