Following yesterday's
speculations, Siemens AG said BenQ will take over its troubled mobile phone operations in a deal that will see the German electronics and engineering group buy a 50 mln eur stake in the Taiwanese company.
Effective October 1, 2005, BenQ will acquire Siemens" entire mobile devices business including all assets and liabilities of the business. Under the agreement, Siemens will become a shareholder in BenQ Corporation by purchasing "50 million in newly issued BenQ shares and providing funds totaling approximately "250 million to support the future of the business. Additionally, BenQ will serve as Siemens" preferred partner for end-to-end mobile communication solutions.
As part of the transaction, BenQ Corporation will gain the exclusive right to use the Siemens trademark for mobile phones for a period of 18 months from closing and co-branding rights to BenQ-Siemens for a period of 5 years from closing. This provides immediate global uplift to BenQ"s business development efforts through an association with the Siemens brand, which ranked number 39 in a recent global brand survey.
Beginning of a new partnership
The partnership, to be headquartered in Munich, will create one of the world"s leading global players in the mobile handset industry, with strong global manufacturing, design expertise and a robust intellectual property portfolio. The strategic partnership combines the uniquely complementary strengths of both companies.
"Today marks the next step in bringing BenQ"s enjoyment philosophy to the worldwide market," said K.Y. Lee, BenQ Chairman & CEO. "The acquisition of Siemens" mobile handset business allows us to bring the strengths of both companies together, enhancing our efforts to bring mobile handsets that reflect today"s digital convergence."
The acquisition reflects a unique complementary partnership. Complementing BenQ"s organizational and manufacturing cost efficiency, leadership in multimedia applications, and a strong understanding of the consumer market, Siemens will add over two decades of managerial experience, research and development, highly trained talents, quick ramp-up manufacturing and a global operations platform.
"With this partnership, we have found a sustainable solution for our mobile handset business," said Klaus Kleinfeld, CEO of Siemens AG. "BenQ and Siemens are two mutually complementary companies that each have many strengths to bring to the table."
The acquisition will create an intellectual property leader in the mobile handset industry. BenQ will have access to Siemens" portfolio of leading edge intellectual property including essential GSM, GPRS and 3G patents. The intellectual property in addition to the strengths of both companies will create a global mobile handset leader.