Benq to acquire Siemens phone unit

BANGALORE: Taiwanese handset major Benq has agreed to buy out Siemens AG's ailing mobile phone unit, after the German company's market share slid to its lowest level in six years.

According to the deal, Siemens will buy 50 million euros ($61 million) worth of new shares in Taipei-based Benq, giving it a 2.5 percent stake, in the company.

Benq, which also produces mobile phones in addition to other consumer electronic products like digital cameras, scanners and LCD screens, will acquire Siemens' entire mobile phone business with more than 6000 employees worldwide, revealed a statement from the Munich based company.

The acquisition will give Benq, which is competing for market share with handset majors Nokia and Samsung access to the European and Latin American markets.

The buy will strengthen Benq's GSM mobile phones business, which it intends to expand as a core business in the future.

As per the agreement, Benq will be acquiring all of Siemens' development and manufacturing locations in Manaus (Brazil) and Kamp-Lintfort (Germany), along with headquarters functions as well as the sales and marketing organization.

The business will be headquartered in Munich. The closing of the deal is expected in the fourth quarter of Siemens' fiscal year 2005.