June 8, 2005

Siemens has sold its mobile phone division to Taiwan's BenQ Corp., which will end Siemens' all-out search for a joint venture partner.

As part of the deal, BenQ will acquire rights to the Siemens brand name for a period of five years and Siemens 6,000 mobile division employees.

BenQ also will snap up manufacturing facilities in Kamp-Lintfort, Germany and Manaus, Brazil. The headquarters of the mobile unit will remain in Germany, the companies said.

Siemens Mobile Devices unit CEO Clemens Joos will serve as the CEO of the combined entity that will consists of the Siemens unit and BenQ's Networking and Communications Business Group.

BenQ expects its mobile phone business to break even next year.

Siemens did not disclose the sale price of the unit, but did announce it will acquire BenQ shares worth $61.4 million and take a pretax charge of $429.5 million. Siemens also has agreed to give BenQ $306 million to provide ongoing support of the mobile phone unit, according to BenQ.

"With this partnership, we have found a sustainable perspective for our mobile phone business," said Siemens' Chief Executive Klaus Kleinfeld.

BenQ expects the deal to propel it to the world's fourth-largest handset manufacturer. The deal is expected to close by Sept. 30, 2005.

Source: Wireless Week