(RTTNews) -  German conglomerate Siemens AG's (SI: News ) hearing aid business is drawing interest from private equity firms, including KKR & Co. L.P. and BC Partners Ltd., Bloomberg reported Thursday, citing two people familiar with the matter.

The Munich, Germany-based electronics and electrical engineering company's hearing aid business is valued at as much as Euro 3 billion, or US$4.5 billion.

According to the Bloomberg report, Siemens has been in contact with investment banks about options for the business, and has not decided whether to sell the unit or conduct an initial public offering. However, the company will likely pursue a dual-track process of seeking a buyer for the unit while simultaneously preparing an IPO for 2010, the report noted.

Siemen's hearing aids business is seen as attractive due to the sector's relatively high margins and as the business could be further improved by a new owner.

Siemens is reportedly considering withdrawing from the hearing aid business in order to intensify its focus on energy, transport and infrastructure, and on medical diagnostics tools. The company trails Switzerland-based Sonova Holding AG (SONVF.PK: News ) and Denmark-based William Demant Holding A/S (WILLF.PK) in the hearing aid business.
In early November, Sonova Holding said it will buy U.S. cochlear implant maker Advanced Bionics Corp. for US$489 million in cash. The transaction is expected to close within the coming three months. The buy means Sonova, which currently has a 24% share of the hearing healthcare market, can put more distance between itself and its largest rivals Siemens and William Demant, each having a 22% market share.

KKR & Co., established in 1976, has offices in the U.S., London, Paris, Tokyo, Sydney, Hong Kong, Beijing, Dubai and Mumbai.

BC Partners, a private equity firm with advised funds of approximately Euro 10 billion, has offices in London, Paris, Milan, Hamburg, Geneva and New York. Since its formation in 1986, the firm has invested in 69 acquisitions with total enterprise value of Euro 65 billion.

SI closed Wednesday's regular trading session at $101.39, up $2.80 or 2.84% on a volume of 0.36 million shares.

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by RTT Staff Writer

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