GN Store Nord A/S - Company Announcement
No injunctive relief from German Appeal Court (Oberlandesgericht)
Earlier today, the appeal court (Oberlandesgericht) in Dusseldorf, Germany,
rendered its decision on the application for injunctive relief to close the
sale of GN ReSound to Sonova (previously Phonak).
In line with the indications given in the hearing on August 1, 2007, the court
decided that it does not have the power to grant injunctive relief in merger
prohibition cases, since only the German Federal Cartel Office
(Bundeskartellamt) can authorize parties to implement a merger before it has
been cleared. This court decision only concerns the application for injunctive
relief, which it considers inadmissible, and is without prejudice to the main
appeal proceedings that are still pending.
This decision departs from previous case law, marks a departure from European
legal standards and effectively gives the German Federal Cartel Office
unfettered power to prohibit mergers without effective judicial review as
transactions cannot be kept in limbo for years awaiting the outcome of main
proceedings.
The share purchase agreement with Sonova has a termination date of August 15,
2007 after which each party can unilaterally terminate the transaction. GN will
consider further judicial steps in relation to the German legal proceedings
between now and August 15 and will revert on the matter that date in the Q2
report.
If the transaction is terminated, GN will pursue all strategic options
including but not limited to a listing of GN Store Nord into two separate
listed entities.
Background
On October 2, 2006, GN signed an agreement to sell GN ReSound to Sonova for a
total consideration of DKK 15.5 billion in cash on a debt and cash free basis.
The transaction was subject to approval by the competition authorities in a
number of countries.
When, in April 2007, the Bundeskartellamt decided to prohibit the transaction
claiming that this would result in collective market dominance in the German
hearing instrument market, GN and Sonova decided to appeal the decision to the
competent court.
In parallel to the main appeal case, GN and Sonova applied for injunctive
relief to close the transaction quickly, one of the arguments being that a
normal time-consuming court process would damage GN's hearing instrument
business.
Today's court decision effectively excludes the possibility of injunctive
relief.
For further information, please contact:
Mogens Hugo
Chairman
GN Store Nord A/S
Tel: +45 45 75 00 00
Jens Due Olsen
Deputy CEO
GN Store Nord A/S
Tel.: +45 45 75 02 00
Taken From gn.com
