By Aaron Kirchfeld, Alex Webb and Adam Ewing Nov 5, 2014 4:01 PM MT
Siemens AG (SIE)’s supervisory board approved the sale of the company’s hearing-aids business to Swedish buyout firm EQT Partners AB and will announce the sale today, according to people familiar with the matter.
EQT will pay about 2.1 billion euros ($2.6 billion) for the asset, said the people, who asked not to be named because the matter isn’t public yet.
Siemens, Europe’s largest engineering company, had been planning to sell shares in the hearing-aids division on the stock market, with Chief Executive Officer Joe Kaeser saying that such a move would help the business to expand as an independent entity. Market turmoil prompted him to seek a sale instead, people with knowledge of the matter had said.
The deal will also help Siemens fund the 6.8 billion euros it spent this year acquiring Dresser-Rand Group Inc. (DRC) and Rolls-Royce Holdings Plc (RR/)’s energy business. Siemens has already sold two health-care units this year and its stake in a household appliances joint venture as Kaeser focuses on supplying equipment for energy generation and supply.
Siemens scrapped a planned sale of the audiology unit in 2010 because bids didn’t meet a target for least 2 billion euros, people familiar with the matter said at the time.
Kaeser is concentrating on the energy business as he seeks to catch up with the profitability of General Electric Co., which has agreed to buy France’s Alstom SA to expand its own energy offering. Kaeser said in May that businesses generating about one-sixth of Siemens’s revenue were unprofitable last year.
Stockholm-based EQT has eyed several large corporate assets this year, including other medical-device makers. The Swedish buyout firm bid for Nobel Biocare Holding AG (NOBN), the Swiss maker of dental implants, before losing out to Danaher Corp. (DHR) in September.
Representatives for Siemens and EQT declined to comment on the deal. Deutsche Presse Agentur reported earlier that Siemens had approved the sale.
To contact the reporters on this story: Aaron Kirchfeld in London at firstname.lastname@example.org; Alex Webb in Munich at email@example.com; Adam Ewing in Stockholm at firstname.lastname@example.org
To contact the editors responsible for this story: Simon Thiel at email@example.com Elizabeth Wollman