German Federal Supreme Court: “Prohibition of GN ReSound Sale to Sonova Was an Error”

GN has now received the complete decision from the German Federal Supreme Court
stating that the decision made by the German Federal Cartel Office
(Bundeskartellamt) on April 11, 2007 prohibiting the sale of GN ReSound to the
Swiss hearing aid manufacturer Sonova was an error. According to the German
Federal Supreme Court, the transaction should have been approved, even without
the remedy package proposed by GN and Sonova which addressed some of the
concerns by the Bundeskartellamt. 

Consequently, GN is considering all legal opportunities in order to claim
compensation for the significant loss imposed on GN Store Nord. The German
Federal Supreme Court has already confirmed that GN will receive compensation
from the Bundeskartellamt for the costs incurred in connection with the appeal. 

The complete decision is being examined in depth by GN's legal advisors and
more details will be published if deemed necessary. 

Background
On October 2, 2006, GN signed an agreement to sell GN ReSound to Sonova for a
total consideration of DKK 15.5 billion in cash on a debt and cash free basis.
The transaction was subject to approval by the competition authorities in a
number of countries. 

In March 2007, the Bundeskartellamt expressed competition related concerns. GN
and Sonova addressed the concerns and suggested a comprehensive remedy package
consisting of, among others, a reduction of GN's German market presence,
including some R&D, manufacturing and worldwide distribution activities as
well as withdrawing from various industry forums in and outside Germany. 

In spite of the above, the Bundeskartellamt in April 2007 decided to prohibit
the transaction claiming that the transaction would allegedly result in
collective market dominance in the German market between Siemens, Sonova and
William Demant Holding. According to the Bundeskartellamt, these remedies were
not sufficient to address the concerns. 

Like GN, Sonova also appealed the decision in May 2007 to the competent court
(Oberlandesgericht in Düsseldorf). Both appeals were rejected. 

In January 2009, GN appealed the decision by the Oberlandesgericht in
Düsseldorf to the German Federal Supreme Court. On April 20, 2010 the German
Federal Supreme Court acknowledged GN's position and overruled the prior
decisions from the Oberlandesgericht in Düsseldorf and the Bundeskartellamt to
prohibit the sale of GN ReSound to Sonova. 

For further information, please contact:

Mikkel Danvold
Director, IR & Communications

GN Store Nord A/S
Tel: +45 45 75 02 71