Due to weak performance, Siemens is selling its mobile phones unit to Taiwan’s largest mobile phone maker, BenQ Corp. As part of the deal, BenQ takes over Siemens’ mobile phone unit, and Siemens will have a 2.5% stake in BenQ.
The price of the sale has not been announced, but Siemens said it would pay $429.9 million in pretax charges. The 2.5% stake that Siemens will have in BenQ is worth about $61.4 million. Under the agreement, the Siemens brand will remain on the phones for the next five years.
“With the acquisition of Siemens’ mobile phones business, we are rapidly approaching our goal to become one of the world’s leading players in the mobile phone industry,” said BenQ Chairman and CEO K.Y. Lee. “Our expansion strategy will be strongly supported by this deal, as we can rely on a global organization with excellent employees, a well-established blue-chip customer base in the mobile business and a strong brand with high impact.”
Siemens has decided to steer away from the consumer market and concentrate more on the industrial part of its business while other European companies are sending more of their business to firms in Asia.
“For us, continuation of the company location in Kamp-Lintfort was an important factor in deciding on a buyer. As agreed upon in the supplementary collective bargaining agreement, we have thus created good prospects for the future for our people. At the same time, the measures settled with our employees have played a crucial role in securing the competitiveness of this facility,” said Siemens CEO Dr. Klaus Kleinfeld.
According to Bloomberg News, Siemens shares “gained as much as 34 cents, or 0.5 percent, to 62.94 euros, its third straight gain, and traded at 62.79 euros as of 11:21 a.m. in Frankfurt. The stock is up 4.67 percent over 12 months, valuing Munich-based Siemens at about 56 billion euros ($69 billion). Benq shares closed 1.2 percent lower at NT$32.1.”
Chris is a staff writer for murdok. Visit murdok for the latest ebusiness news.
