UK watchdog says Cochlear's Oticon Medical deal could harm market

[April 20, 2023]  (Reuters) -Britain's Competition and Markets Authority said on Thursday that Australian hearing device maker Cochlear's purchase of Demant's hearing implants business could hurt competition and mean higher prices for the National Health Service.

The proposed 850 million Danish crown ($125 million) deal between two of the biggest players in Britain's hearing implant market could lead to worse outcomes for patients and higher prices for the state-funded NHS, the CMA said in a statement.

Cochlear said it disagreed with the CMA's findings, adding that the group along with Denmark's Demant would "engage constructively" to address its concerns.

Demant said that irrespective of the outcome of ongoing investigations by competition authorities, it remained committed to its decision to "discontinue" its Oticon Medical as it had already concluded it had no prospect of becoming a global leader in hearing implants within a reasonable timeframe.
 

Demant logo is seen in this illustration taken, May 1, 2022. REUTERS/Dado Ruvic/Illustration

The deal is also under investigation by the European Union (EU) and Australian antitrust regulators, and is pending clearance under French Foreign Direct Investment rules.

The CMA has set a June 5 deadline for its in-depth probe of the deal, which Cochlear said was no longer expected to close before June 30.

The regulator said the combined entity would leave only a single supplier of passive bone conductive solution (BCS) products in Britain and would dominate the supply of BCS products in the country, with a share well above 90%.

($1 = 6.7929 Danish crowns)

(Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Rashmi Aich and Alexander Smith)

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