BenQ Corp (明基電通), Taiwan's biggest mobile phone maker, yesterday announced that it will acquire Siemens AG's debt-ridden handset unit, aiming to bring the Taiwanese brand onto the world stage.
The deal will turn Taipei-based BenQ into one of the world's biggest cell phone vendors overnight, with annual revenues doubling to a total of US$10 billion, the head of the company said yesterday at a press conference.
"BenQ has been seeking ways to boost its economic scale and manufacturing capabilities to become a leading mobile phone player. We think Siemens is a partner that will be complementary," chairman Lee Kun-yao (
Lee said the company will acquire Siemens' entire mobile phone business, with more than 7,000 employees worldwide, and will have its headquarters in Munich.
In a joint statement issued yesterday, BenQ said it will be acquiring all of Siemens' development and manufacturing locations in Manaus, Brazil and Kamp-Lintfort in Germany. The factory in Shanghai, which is operated as a joint venture together with a Chinese partner, will also remain a development and manufacturing location, it said.
Under the terms, BenQ will also get 250 million euros in cash from the German phone giant to develop patents and market the new brand BenQ-Siemens, according to the company.
Within 5 years after the agreement takes effect in October, BenQ will be able to launch products under the co-brand BenQ-Siemens, the company said. After that, BenQ will run only its own brand, the company added.
Siemens will also spend 50 million euros to get a 2-percent stake in BenQ by purchasing the company's global depositary receipts (GDRs) by September at the earliest, BenQ said in a statement.
As Siemens, the world's No.5 cellphone vendor, will absorb all of the losses incurred before the agreement takes effect, BenQ chief financial official Eric Yu (
With the contribution from Siemens, BenQ's handset shipment will exceed 15 million units this year, up from 10 million estimated previously, Yu said. The company will hold a special shareholders' meeting on July 28 to approve the acquisition deal and the issurance of GDRs.
Vincent Chen (陳豊丰), an analyst with CLSA Ltd (里昂證券) in Taipei, is quite conservative about the acquisition, citing uncertainties.
"It will be a challenge for BenQ to reach the break-even point for the new mobile operation next year as the company hopes. It will be good enough for BenQ to shrink losses from the unit by cost savings," Chen said.
"The only positive part of the deal is BenQ will have no cash offer for Siemens' handset division, but overall, I'm still negative about the acquisition," Chen added.
But Daniel Wang (
"Siemens' offer looks quite positive to BenQ, especially for BenQ's brand business," Wang said. Besides, BenQ will have chance to take over Singapore's Flextronics to make phones in the pipeline, he added.
The key question is how much BenQ can reduce its costs to compete directly with mobile phone giants Nokia Oyj and Motorola Inc, which are slashing prices to gain market share, Wang said.
BenQ shares yesterday lost NT$0.9 to NT$32.5 yesterday on the Taiwan Stock Exchange after the purchase of Siemens' handset division was disclosed on Monday.
FALSE DOCUMENTS? Actor William Liao said he was ‘voluntarily cooperating’ with police after a suspect was accused of helping to produce false medical certificates Police yesterday questioned at least six entertainers amid allegations of evasion of compulsory military service, with Lee Chuan (李銓), a member of boy band Choc7 (超克7), and actor Daniel Chen (陳大天) among those summoned. The New Taipei City District Prosecutors’ Office in January launched an investigation into a group that was allegedly helping men dodge compulsory military service using falsified medical documents. Actor Darren Wang (王大陸) has been accused of being one of the group’s clients. As the investigation expanded, investigators at New Taipei City’s Yonghe Precinct said that other entertainers commissioned the group to obtain false documents. The main suspect, a man surnamed
The government is considering polices to increase rental subsidies for people living in social housing who get married and have children, Premier Cho Jung-tai (卓榮泰) said yesterday. During an interview with the Plain Law Movement (法律白話文) podcast, Cho said that housing prices cannot be brought down overnight without affecting banks and mortgages. Therefore, the government is focusing on providing more aid for young people by taking 3 to 5 percent of urban renewal projects and zone expropriations and using that land for social housing, he said. Single people living in social housing who get married and become parents could obtain 50 percent more
DEMOGRAPHICS: Robotics is the most promising answer to looming labor woes, the long-term care system and national contingency response, an official said Taiwan is to launch a five-year plan to boost the robotics industry in a bid to address labor shortages stemming from a declining and aging population, the Executive Yuan said yesterday. The government approved the initiative, dubbed the Smart Robotics Industry Promotion Plan, via executive order, senior officials told a post-Cabinet meeting news conference in Taipei. Taiwan’s population decline would strain the economy and the nation’s ability to care for vulnerable and elderly people, said Peter Hong (洪樂文), who heads the National Science and Technology Council’s (NSTC) Department of Engineering and Technologies. Projections show that the proportion of Taiwanese 65 or older would
Democracies must remain united in the face of a shifting geopolitical landscape, former president Tsai Ing-wen (蔡英文) told the Copenhagen Democracy Summit on Tuesday, while emphasizing the importance of Taiwan’s security to the world. “Taiwan’s security is essential to regional stability and to defending democratic values amid mounting authoritarianism,” Tsai said at the annual forum in the Danish capital. Noting a “new geopolitical landscape” in which global trade and security face “uncertainty and unpredictability,” Tsai said that democracies must remain united and be more committed to building up resilience together in the face of challenges. Resilience “allows us to absorb shocks, adapt under
RSS