* Siemens names Roger Radke as new head of unit
* Radke replaces Stefan Schaller
* Siemens says sees appointment strengthening the unit
* Shares up 3 percent, outperforming market
(Adds analyst comment, background, updates shares)
FRANKFURT, March 16 (Reuters) – German industrialconglomerate Siemens (SIEGn.DE) dashed any remainingexpectations for a sale of its hearing aid business on Tuesdayby naming a new chief executive for the unit.
The German industrial conglomerate appointed Roger Radke asnew chief executive for Siemens Audiologische Technik, replacingStefan Schaller, who will take another job within the company.
“The sector expects this appointment to further strengthenits global hearing instrument activities, particularly sinceRadke boasts wide-ranging experience and an excellent network inthe industry due to his previous management position in Siemens’audiology area,” Siemens said in a statement.
two sources familiar with the matter told Reuters on Mondaythat Siemens had decided to scrap plans to sell the hearing aidunit because bids were too low. Company sources had previouslysaid Siemens was not willing to consider any bid below 2 billioneuros ($2.73 billion). [ID:nLDE62E23A]
Financial sources had said private equity firms Cinven[CINV.UL] and Bain Capital as well as two consortiums wereinterested in the hearing aid unit.
One consortium consisted of private equity firm Permira[PERM.UL], Nordic Capital and German hearing aid maker Hansaton.The other group comprised KKR [KKR.UL], Hellman & Friedman andAustralian hearing aid producer Cochlear (COH.AX) (COH.AX), thesources said.
a highly-placed source had told Reuters this month that ifthe sale was called off, Siemens would have to invest around 600million euros to grow its own dealership network and contestrival Sonova (SOON.VX). [ID:nLDE621222]
Siemens shares gained 3 percent by 1539 GMT amid a broadmarket rally that had the DAX index .GDAXI up 1.4 percent.
“At no point did our model reflect the potential disposal ofthe hearing aid division. The company merely stated that adisposal was under review,” DZ Bank analyst Karsten Oblingertold clients before news of the management move.
“We do not see any negative impact for the share price fromthe possible halting of sales negotiations,” he added,confirming his ‘buy’ rating and fair value of 79 euros pershare.
Siemens does not disclose financial data for SAT. One sourcesaid this month its operating margin has always been well above20 percent, but dropped to 26 percent last year from 30 percent.
Siemens regards SAT as a non-core business in its Healthcaresegment because its distribution channel is totally differentfrom the other cash cows within the sector.
Diagnostics — which offers laboratory testing forhaematology, chemistry and urinalysis — and Imaging — whoseproducts include computed tomography, mammography andradiography — sells directly to hospitals and counts GeneralElectric (GE.N) as its main competitor.
for a dealtalk on the story click on [ID:nLDE62F1B4] (Reporting by Jens Hack, Marilyn Gerlach and Maria Sheahan)