(Reuters) – German engineering group Siemens (NYSE:SI) is in advanced talks to sell its hearing-aids business for more than €2 billion ($2.5 billion), with private equity firm EQT the frontrunner, 2 people familiar with the matter said.
EQT was 1 of 3 parties to submit binding bids for Siemens Audiology Solutions by Friday Oct. 17, along with fellow private equity firm Permira and Danish hearing-aids maker GN Store Nord, another source close to the matter said.
Siemens, EQT, Permira and GN declined to comment.
Bloomberg had reported earlier that EQT was the frontrunner to buy the business.
Siemens this year announced plans to list its audiology unit, but declining equity markets have made such a move less attractive and sources told Reuters in August that the group was renewing efforts to divest the business.
Another 2 sources close to the matter said that Siemens had not given up on the idea of a possible initial public offering, despite rocky equity markets that have caused several IPOs to be pulled or delayed.
A spin-off to existing shareholders is also an option.
Siemens CEO Joe Kaeser is seeking to focus the group on its most promising businesses to close the gap on more profitable competitors such as Switzerland’s ABB and United States-based GE Healthcare (NYSE:GE).
The German trains-to-turbines group has sold or spun off a string of assets in the past decade but failed to find a buyer for Siemens Audiology Solutions 4 years ago.
Sources familiar with the business, whose accounts Siemens does not publish separately, have said it has annual sales of about €700 million and core earnings of €160 million to €170 million.