Siemens, EQT/Santo Holding

The deal: Siemens sells its hearing aid business to EQT Partners and Santo Holding
The price tag: $2.7 billion
Inversion? No
Status: Recently closed

Why it matters: The big question is whether this transaction foreshadows a potential sale of Siemens' entire healthcare business. After all, this sale marked the third healthcare divestiture for the German conglomerate, coming on the heels of sales of its hospital information technology and microbiology businesses.

Moreover, the company announced last year that it is managing its entire healthcare business as a standalone entity, something that is often done to set the stage for a future separation. But CEO Joe Kaeser said during a November earnings call that the healthcare unit will remain part of the conglomerate and operate as a "company within the company."

Siemens CEO Joe Kaeser

If $2.7 billion seems like a lot to pay for hearings aids, that's because it is. "We are very pleased about the price and conditions of the hearing aids (sale), which, obviously, also shows that Siemens can also sell high--very high, actually," Kaeser said after announcing the closure of the transaction during the company's recent earnings call for the first quarter of fiscal year 2015.

Private equity firm EQT will hold a majority stake in the hearing aids business, formerly dubbed Siemens Audiology Solutions, with Santo Holding (the investment company of Germany's Strüngmann family) holding a smaller share. Siemens will keep a preferred equity investment of €200 million ($248.4 million) in the unit. Siemens said the unit earned revenue of €693 million ($860.8 million) in fiscal year 2014 and reported pretax earnings of €145 million ($180.1 million).

The bad news from the earnings call is that Siemens Healthcare profit plunged 13% during the recently completed quarter to €413 million ($472 million), and layoffs are looming. The company's healthcare dilemma, however, is not unique among fellow conglomerates. Philips ($PHG), for example, consolidated its healthcare offerings into a single unit called HealthTech and plans to focus on healthcare informatics.

Investors periodically yearn for General Electric ($GE) to become a more focused company, but it hasn't made any dramatic reorgs to GE Healthcare, which already reports its financials separately. However, like Siemens, GE has been selling off noncore device businesses, such as the sale of its Vital Signs specialty disposable division to CareFusion ($CFN) for $500 million in 2013.

All three conglomerates are strong in the imaging arena. Philips beefed up further in that arena with its purchase Volcano for $1.2 billion, a deal that just missed the cut for inclusion in this list.

For more:
Siemens plans 7,000+ layoffs after disappointing healthcare performance
Siemens sells hearing aid biz for $2.7B amid rumors it will exit healthcare entirely

Siemens, EQT/Santo Holding