Taiwan's BenQ to buy Siemens' cellphone business
Taiwan-based BenQ is set to acquire the mobile phone business unit belonging to Siemens.
The Germany-based industrial giant has been looking at options to divest its mobile phone division for some time, during which time its market share has plummeted.
BenQ sees the deal as a key part of its expansion strategy as it seeks to become one of the top global suppliers of wireless handsets. The Taiwanese company had a global market share of only 0.3% in the first quarter of 2005, compared with Siemens 5.4%.
If the acquisition, which is subject to approval by BenQ shareholders and regulatory bodies, goes ahead, BenQ will take on the 6000 employees working in the Siemens unit.
Under the terms of the agreement, BenQ will be allowed to use the Siemens brand for five years.
The Taiwanese company, which already has a strong handset presence in Asia and also sells a range of consumer electronics products including LCD screens, cameras and scanners, believes that the Siemens division will give it access to the European and Latin American markets.
Siemens was ranked as the fourth-largest global supplier of cell phones in 2003 with a market share of 8.4% according to the market analyst company Gartner. However, the recent uncertainty over the future of its mobile division was seen as a major factor as Siemens' market share fell behind that of Korea's LG.
And following the most recent quarterly sales figures, Siemens looked set to drop behind SonyEricsson with both companies registering a market share of 5.4% (see related story).
Siemens was alone among the leading cell phone suppliers to sell fewer handsets in early 2005 than it did in the previous year.
If the acquisition is approved, BenQ will acquire all of Siemens' development and manufacturing sites, which are located in Brazil, Germany and China.
Meanwhile, Siemens is set to acquire new BenQ shares to the value of €50 million and says that it will treat BenQ as a preferred partner for its remaining mobile communications activities.
