Reuters reports that Germany’s supreme court has struck down a decision that had blocked the sale of GN Store Nord’s hearing aid division, thus removing a key obstacle to consolidation in the hearing industry. As Germany constitutes approximately 10% of the worldwide hearing aid market, the previous court decision blocking the GN-Sonova deal had essentially prohibited any company with significant market shares in Germany from acquiring, or merging with, each other.
The announcement triggered a surge in GN’s shares. Reuters reports that the company said it did not expect the court’s ruling to facilitate compensation, and it did not plan to revive the sale of its ReSound division.
GN had filed an appeal after German antitrust authorities in 2007 blocked the planned $2.8 billion sale of ReSound to Sonova, its Swiss rival and parent company of Phonak and Unitron.
For more on the original decision of the German court to block the sale, click here.
Sonova said it had no plans to make a new offer for ReSound, according to the Reuters article. William Demant’s chief executive declined to comment to Reuters on whether his company is interested in buying ReSound. Trading in GN’s stock was temporarily halted on the Copenhagen bourse after rising 8% in early trade, but extended gains when trading resumed.
The new ruling could instigate takeovers in the hearing aid manufacturing industry where GN and Sonova rank among the world leaders, along with German-based Siemens and Danish-based William Demant Holding (Oticon and Bernafon), US-based Starkey Laboratories, and Widex.
In March, Siemens cancelled plans to sell its hearing aid business after it received bids that sources close to the deal said the company saw as too low (below 2 billion euros or US$2.73 billion).
Source: Reuters and HR
