On August 8, 2007, the appeal court (Oberlandesgericht) in Dusseldorf, Germany, 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. The court decision only concerns the application for injunctive relief, which the court considers inadmissible, and is without prejudice to the main appeal proceedings that are still pending.
The share purchase agreement with Sonova contains a termination date of August 15, 2007 after which date each party can unilaterally terminate the transaction. Following the recent developments, Sonova has today sent a notification informing GN that they wish to terminate the transaction. GN has taken notice of the termination notified by Sonova, and acknowledges that Sonova according to the share purchase agreement can terminate the transaction.
GN will, nonetheless, continue to pursue the main appeal unilaterally. GN will in parallel pursue all possible strategic options including but not limited to an alternative transaction or a possible listing of GN in two separate entities.
Costs associated with the divestment of GN ReSound have so far amounted to payments of DKK 115 million which are included in Assets held for sale. This amount will substantially increase in line with additional work done on strategic alternatives and in line with the running costs of ongoing retention plans. In case that it is decided not to proceed with the divestment of GN ReSound, all transaction costs will be expensed immediately.
GN ReSound Sale Update
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