Siemens ADR will sell off its hearing-aid business to European private-equity firm EQT Partners and Germany's Strüngmann family for 2.15 billion euros ($2.69 billion), the company said in a statement on Thursday. As a result, the technology company will not publicly list its Siemens Audiology Solutions, a decision that was taken in May.
The Munich-based company said, in the statement, that it will continue to be invested in the hearing-aid business with preferred equity worth 200 million euros and added that it will also have a seat on the board of the buyer's group. The new entity’s products will be allowed to use the Siemens name in the medium term, the company said. The deal, which needs regulatory approval, is expected to be closed in the first three months of 2015, with about 1.1 billion euros in equity.
“Not only is the transaction excellent from a financial perspective; we're also convinced that both investors have a clear growth strategy for further developing the hearing aid business over the long term,” Hermann Requardt, CEO of Siemens Healthcare and a member of the Siemens AG's board, said, in the statement.
EQT manages nearly 22 billion euros in assets and specializes in the health care and medical engineering sectors. The Strüngmann family founded Munich-based Hexal, a generic drug maker, in 1986.
"The Siemens audiology business has a very strong heritage for innovative, high quality products and we have been particularly impressed with the strong track record over the last couple of years. EQT is fully committed to supporting the management and employees in developing the business further," Marcus Brennecke, a partner at EQT, said in the statement.
Siemens has been in the audiology business for over 100 years and introduced its first hearing aid, Esha-Phonophor, in 1913. The business employs over 5,000 people and generated revenues worth 693 million euros in 2014.