Cochlear, Synthes seen front runners for Siemens' hearing aid unit
27 January 2010
Australian cochlear implant maker Cochlear Ltd. and Switzerland's Synthes Inc. have emerged as the front runners for Siemens AG's hearing aid unit Siemens Hearing Instruments (SAT) ahead of binding bids due on 22 February, newspapers reported yesterday.
The deal is expected to be in the range of more than 2 billion euros.
The two companies are joining hands with a slew of private equity firms such as private equity firm Hellman & Friedman and asset manager Kohlberg Kravis Robert (KKR) for the German company, which sells one in four of the world's hearing aids.
Cochlear dominates the market for bone-anchored hearing systems, which unlike conventional hearing aids are implanted surgically in the bone behind the ear.
If the deal goes ahead, Cochlear would increase its market capitalisation from $3.7 billion to around $9 billion, and would need to raise significant capital.
Siemens wants to get spin off the unit as it plans to focus on its core areas.