BenQ acquires Siemens' cellphone business
June 7, 2005 - 11:42 EST
After several quarters of huge losses and accelerating declines in global market shares, Siemens cellphone division gets a new start. BenQ today said that it will take over the struggling business and advance to become the world's fourth largest cellphone manufacturer and a technology company with a market capitalization of more than $10 billion.
Siemens agreed to provide 250 million Euros (about $310 million) in cash to support the new business. The deal includes all intellectual property developed by Siemens Mobile Devices, manufacturing facilities of Kamp-Lintfort, Germany and Manaus, Brazil; R&D centers in Munich, Ulm and Kamp-Lintfort, Germany; Beijing, China; Aalborg, and Denmark as well as a 8.4 percent stake in Symbian. In return, Siemens will receive a 2 percent stake in BenQ. Munich will become the headquarter of BenQ's global cellphone business.
According to media reports Siemens has been negotiating a sale of its cellphone unit for several months. Sources told Tom's Hardware Guide that Motorola was the most likely buyer, but recently backed out of the deal.
Siemens was the only cellphone manufacturer among the global top-6 to see declining sales and market shares over the past quarters. Despite a booming cellphone market Siemens appeared to be unable to take advantage of opportunities in evolving markets such as Latin America and Africa as well as quickly maturing geographies such as North America. According to market research firm Gartner, Siemens held a 5.5 percent market share in the first quarter of this year, down from 8.0 percent in 2004. Sales tumbled from 12.3 million units to 9.9 million in the same time frame. In contrast, LG was able to increase sales from 8.2 million to 11.1 million and even slowly recovering Sony Ericsson climbed from 8.6 million to 9.9 million units. (THG)