FRANKFURT, March 16 (Reuters) - German industrial conglomerate Siemens dashed any remaining expectations for a sale of its hearing aid business on Tuesday by naming a new chief executive for the unit.
The German industrial conglomerate appointed Roger Radke as new chief executive for Siemens Audiologische Technik, replacing Stefan Schaller, who will take another job within the company.
'The sector expects this appointment to further strengthen its global hearing instrument activities, particularly since Radke boasts wide-ranging experience and an excellent network in the industry due to his previous management position in Siemens' audiology area,' Siemens said in a statement.
Two sources familiar with the matter told Reuters on Monday that Siemens had decided to scrap plans to sell the hearing aid unit because bids were too low. Company sources had previously said Siemens was not willing to consider any bid below 2 billion euros ($2.73 billion).
Financial sources had said private equity firms Cinven and Bain Capital as well as two consortiums were interested in the hearing aid unit.
One consortium consisted of private equity firm Permira , Nordic Capital and German hearing aid maker Hansaton. The other group comprised KKR, Hellman & Friedman and Australian hearing aid producer Cochlear, the sources said.
A highly-placed source had told Reuters this month that if the sale was called off, Siemens would have to invest around 600 million euros to grow its own dealership network and contest rival Sonova.
Siemens shares gained 3 percent by 1539 GMT amid a broad market rally that had the DAX index up 1.4 percent.
'At no point did our model reflect the potential disposal of the hearing aid division. The company merely stated that a disposal was under review,' DZ Bank analyst Karsten Oblinger told clients before news of the management move.
'We do not see any negative impact for the share price from the possible halting of sales negotiations,' he added, confirming his 'buy' rating and fair value of 79 euros per share.
Siemens does not disclose financial data for SAT. One source said this month its operating margin has always been well above 20 percent, but dropped to 26 percent last year from 30 percent.
Siemens regards SAT as a non-core business in its Healthcare segment because its distribution channel is totally different from the other cash cows within the sector.
Diagnostics --- which offers laboratory testing for haematology, chemistry and urinalysis -- and Imaging -- whose products include computed tomography, mammography and radiography -- sells directly to hospitals and counts General Electric as its main competitor.
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(Reporting by Jens Hack, Marilyn Gerlach and Maria Sheahan) ($1=.7318 Euro) ($1=.7318 Euro) Keywords: SIEMENS/HEARINGAID (maria.sheahan@thomsonreuters.com; +49 69 7565 1286; Reuters Messaging: maria.sheahan.thomsonreuters.com@thomsonreuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
The German industrial conglomerate appointed Roger Radke as new chief executive for Siemens Audiologische Technik, replacing Stefan Schaller, who will take another job within the company.
'The sector expects this appointment to further strengthen its global hearing instrument activities, particularly since Radke boasts wide-ranging experience and an excellent network in the industry due to his previous management position in Siemens' audiology area,' Siemens said in a statement.
Two sources familiar with the matter told Reuters on Monday that Siemens had decided to scrap plans to sell the hearing aid unit because bids were too low. Company sources had previously said Siemens was not willing to consider any bid below 2 billion euros ($2.73 billion).
Financial sources had said private equity firms Cinven and Bain Capital as well as two consortiums were interested in the hearing aid unit.
One consortium consisted of private equity firm Permira , Nordic Capital and German hearing aid maker Hansaton. The other group comprised KKR, Hellman & Friedman and Australian hearing aid producer Cochlear, the sources said.
A highly-placed source had told Reuters this month that if the sale was called off, Siemens would have to invest around 600 million euros to grow its own dealership network and contest rival Sonova.
Siemens shares gained 3 percent by 1539 GMT amid a broad market rally that had the DAX index up 1.4 percent.
'At no point did our model reflect the potential disposal of the hearing aid division. The company merely stated that a disposal was under review,' DZ Bank analyst Karsten Oblinger told clients before news of the management move.
'We do not see any negative impact for the share price from the possible halting of sales negotiations,' he added, confirming his 'buy' rating and fair value of 79 euros per share.
Siemens does not disclose financial data for SAT. One source said this month its operating margin has always been well above 20 percent, but dropped to 26 percent last year from 30 percent.
Siemens regards SAT as a non-core business in its Healthcare segment because its distribution channel is totally different from the other cash cows within the sector.
Diagnostics --- which offers laboratory testing for haematology, chemistry and urinalysis -- and Imaging -- whose products include computed tomography, mammography and radiography -- sells directly to hospitals and counts General Electric as its main competitor.
For a dealtalk on the story click on
(Reporting by Jens Hack, Marilyn Gerlach and Maria Sheahan) ($1=.7318 Euro) ($1=.7318 Euro) Keywords: SIEMENS/HEARINGAID (maria.sheahan@thomsonreuters.com; +49 69 7565 1286; Reuters Messaging: maria.sheahan.thomsonreuters.com@thomsonreuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.