GN ReSound Stays in the GN Family

Following the surprising obstruction by the German Federal Cartel Office to block Sonova's acquisition of GN ReSound, the GN Supervisory Board decided on November 6 to keep GN ReSound in the GN family.

"Since August, we have explored all relevant strategic options available to GN ReSound," explains Mogens Hugo, Chairman of GN's Supervisory Board. "Our conclusion is crystal clear: It is in the best interest of our shareholders to keep GN ReSound and GN Otometrics as a part of GN."

The Board's strategic analysis encompassed three main options: To pursue another sale, to demerge GN's headset and hearing instrument businesses and list them as separate companies, or to keep GN ReSound in the family.

"The first option turned out to be rather disadvantageous to our shareholders. More than 10 financial buyers, but no strategic buyers, provided indicative offers. The financial investors would be unable to achieve industrial synergies, they didn't see the same attractive upside as a strategic buyer and were not willing to offer a sufficient premium for our future earnings potential. We concluded that a sale under these circumstances would not be prudent," says Mogens Hugo.

The hearing instrument industry is an attractive business with strong growth rates and high margins, so the Supervisory Board does not view its decision as a last resort: "No, on the contrary. We foresee a very lucrative future for this business, but I have to be frank: we need to implement some radical changes to pursue these opportunities, as the business is clearly suffering from 16 months in ownership limbo. That will change now!" says Mogens Hugo.

Under a new management, which will be in place in a not too distant future, and a new governance structure, GN ReSound will focus 100% on the day-to-day business and on winning back key customers and orders lost in the futile sales process. Further investments will be made in the retail and distribution channels, backed up by a strong pipeline and a number of product launches.

"My message here today to customers, distributors and our own managers and employees is clear: We're definitely back in business!" says Mogens Hugo.

For more information on the complete family of ReSound hearing instruments, visit www.gnresound.com, or the ReSound Web Channel on Audiology Online.