ACCC says it will not oppose revised Cochlear, Oticon Medical transaction

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The ACCC has announced it will not oppose Cochlear's (ASX:COH) proposed acquisition of the cochlear implants business of Oticon Medical A/S from its parent company, Demant A/S.

Cochlear announced its $170 million plan to acquire Oticon Medical in April following Demant’s decision to exit its hearing implants business activities.

The ACCC said it raised significant competition concerns about the acquisition.

“The transaction has now been changed to remove the bone conduction solutions business, which addresses the significant concerns the ACCC had in relation to bone conduction solutions,” said ACCC Commissioner Stephen Ridgeway.

Oticon Medical has a small market share and does not provide significant competition in the supply of cochlear implants in Australia.

The ACCC said it also considers it unlikely that Oticon Medical would have become a stronger competitor in the supply of cochlear implants in the foreseeable future.

“We concluded that Cochlear’s proposed acquisition of Oticon’s cochlear implants business was unlikely to substantially lessen competition in Australia,” said Mr Ridgeway. “We were concerned that the original proposed acquisition would lead to higher prices, lower quality or service levels and less innovation in the supply of surgical and non-surgical bone conduction solutions.”

Demant will retain Oticon’s bone conduction solutions business, selling only its cochlear implants business.

“The ACCC is satisfied that its competition concerns with respect to bone conduction solutions are addressed,” added Mr Ridgeway.