Siemens Divests Hearing Aid Business Unit

Global conglomerate Siemens (Munich, Germany) has announced the sale of its Siemens Audiology Solutions unit for USD 2.68 billion.

Private equity firm EQT Partners (Stockholm, Sweden) will hold the majority stake, while Santo Holding (Pöcking, Germany), the investment company of the Strüngmann family, will hold the smaller share. Siemens itself will keep a preferred equity investment of EUR 200 million in the unit. The sale follows Siemens' previous divestment of its hospital information-technology (IT) and microbiology businesses. In October 2014, Siemens separated its healthcare business from the rest of Siemens, which analysts speculated could be a preamble towards selling the rest of the healthcare business.

The disposal of the hearing-aid, microbiology, and IT divisions would leave Siemens Healthcare primarily with the medical imaging and diagnostics unit, which manufactures products such as computerized tomography (CT) scanners, magnetic resonance imaging (MRI) machines, and ultrasound technology. And although the medical imaging unit is the most lucrative in Siemens healthcare portfolio, it is growing slowly because of a weakening global market for healthcare equipment and solutions.

“We have followed the company and the industry closely for many years and we believe Siemens Audiology Solutions provides the ideal platform for an entry into this attractive industry,” said Marcus Brennecke, a partner at EQT Partners. “EQT VI is fully committed to supporting the management and employees in taking the company to the next level through EQT's growth oriented approach and by putting in place a highly relevant industrial board.”

“We are pleased to take a partner on board with a track record of creating value by applying a long-term industrial approach with focus on growing the top-line,” said Hermann Requardt, CEO of Siemens Healthcare. “Thanks to the Wallenberg family background of EQT and their co-investor, the Strüngmann family, we are confident that the audiology business will be treated with the right industrial values.”

“The management team is very excited about getting EQT as a new partner and we are looking forward to taking our business to its full potential through continued investments, and by leveraging EQT's strong network of industrial advisors with specific hearing aids and broader healthcare expertise,” said Roger Radke, CEO of Siemens Audiology Solutions.

Siemens Audiology Solutions (Singapore) has its beginnings in Germany in 1878, when the first telephone receiver was developed by Siemens to enabling hearing impaired people comprehend conversations better. Since the launch of the Micon product platform (in 2012), the company has experienced accelerated growth, selling over three million hearing aids in the last 12 months.

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