Reuters quotes sources saying Cochlear Ltd., one of three global suppliers of cochlear implant devices as well as a leader in bone-anchored hearing aids, intends to join two private equity firms in making a multi-billion dollar bid for Siemens Hearing Instruments, which is being spun off by its parent company. The report also says Synthes, a global medical equipment manufacturer, also will join the bidding.
This is a huge story for the hearing aid industry, which is going through a wave of consolidation as the leading global players try to simultaneously gain market share by broadening their distribution at the low end of the market while building war chests for a new generation of R&D-led innovation at the high end of the market. Putting the very high end digital technologies required for cochlear implants under the same roof as mainstream digital hearing aids will give a shot of much-needed energy into high-end hearing-aid innovation.
Sonova CEO Valentin Chapero kicked off the industry’s consolidation charge in 2007 with his failed bid to acquire GN Resound and vault to undisputed leader of the global industry. Undaunted, in November 2009 Sonova made a bid to acquire Advanced Bionics (AB), the U.S.-based cochlear implant maker. Then in January 2010 Sonova acquired InSound Medical, developer of an innovative hearing aid implanted deep within the ear canal. Assuming the AB deal passes regulatory approvals, Sonova have a vertically line of hearing assistance products, offering everything from inexpensive entry-level hearing aids all the way up to the most sophisticated cochlear implant technologies available.
Cochlear’s strategy appears to be similar to Phonak’s, but it will enter the market from the opposite direction by leveraging its strong position in high-end cochlear implant technology to move into the mainstream hearing-aid market with the acquisition of Siemens Hearing, one of the world’s seven largest hearing-aid suppliers.