The BKartA's decision to prohibit the intended acquisition of Swiss firm GN ReSound's hearing device business by Danish firm Phonak (now "Sonova") in early April 2007 had caused the parties to abandon the transaction. The intended tie-up through the US$ 2.6 billion deal would have created the world's largest hearing-aid manufacturer.

Despite competition clearance in the US and other EU countries, the BKartA had blocked the merger due to serious concerns over the creation of collective market dominance in the German hearing aid market among Siemens, Sonova and William Demant Holding. The BKartA said in a statement at the time that:

"[T]he merger would have further strengthened this oligopoly by pushing the three groups' combined market share to about 90 per cent."

Commitments offered by GN ReSound to reduce its presence in Germany were rejected by the BKartA and consequently the deal did not go ahead.

GN ReSound challenged the prohibition decision in the German courts, from the higher regional court in Düsseldorf to the BGH. Despite winning the case, GN ReSound says it will not proceed with the merger. However, according to GN ReSound's counsel, it is likely that GN ReSound will examine whether it can now claim compensation in Germany. However, any such decision on the claim will most likely only be made once the full decision of the BGH is published. Community Week will return to the issues raised by this case and provide more detail once the decision is made public.

To view Community Week, Issue 468 - 23 April 2010 in full, click here.

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