By David H. Kirkwood
ERLANGEN, GERMANY—More than three years after Siemens tried to sell its hearing aid division but failed to attract an acceptable bid, reports on The Wall Street Journal’s Market Watch web site and elsewhere online say that the German industrial giant is planning to try again later this year. The reports cite unnamed informed sources.
Siemens has declined to comment on the reports, just as it did in 2009, when the company first shopped its Erlangen-based Siemens Audiologische Technik GMBH. Alina Urdaneta, vice-president of marketing for Siemens Hearing Instruments, Inc., in Piscataway, NJ, told Hearing News Watch this week that the company’s policy is not to comment on such rumors. She added, “There is always speculation of this sort in the media.”
Three years ago, when Siemens was interested in selling its hearing aid division, a number of suitors emerged. However, none of their bids came close to the $2 billion Euro (about $2.7 billion) price that the company was reportedly asking, so Siemens decided to remain in the hearing aid business.
CIRCUMSTANCES HAVE CHANGED
If Siemens–whose $113 billion in annual sales revenues place it 47th on Fortune’s list of the 500 largest global companies–does want to divest itself of Siemens Audiologische, conditions for a sale may be better than they were last time it tried.
For one thing, since its earlier effort failed, Siemens has invested substantially in expanding its range of hearing products and improving their quality. One of its successes has been the Aquaris, a waterproof hearing aid introduced in 2011 that can be safely worn in the shower or in the swimming pool. It garnered favorable attention last month in Gadgetwise, a New York Times blog.
Another factor that may prove beneficial to Siemens is a change in the European regulatory landscape that occurred shortly after its unsuccessful attempt. In April 2010, the German Federal Supreme Court overturned a ruling by the German Federal Cartel Office that had prevented Sonova, parent company of Phonak, from purchasing ReSound from its parent company, GN Store Nord, for more than $2.6 billion.
The Cartel Office contended that the merger of two of the world’s six major hearing aid manufacturers would create an illegal oligopoly. That may have discouraged companies such as Sonova and William Demant, Oticon’s parent company, from trying to acquire the Siemens hearing aid unit in 2009.
Now, however, in light of the German high court’s overrule of the cartel office, a Big Six company might be emboldened to bid for Siemens.
Stay tuned for further developments.