Fujitsu Siemens to buy Siemens unit

Fujitsu Siemens to buy Siemens unit

Fujitsu Siemens will buy the Product Related Service Division of Siemens Business Services for an undisclosed sum, as Siemens also sells Siemens Acceleration.

Fujitsu Siemens Computers on Wednesday said it plans to acquire the Product Related Services Division of Siemens's Siemens Business Services group. The companies did not disclose the price of the acquisition, which is expected to close in March 2006.

The Product Related Services Division, which offers IT services including help-desk functions as well as maintenance of PCs and servers, earned about Euro 1.3 billion (US$1.5 billion) in fiscal year 2005 and employs 5,000 people in 28 countries, including 2,000 workers in Germany. Fujitsu Siemens has been using the services of the unit for a long time and the acquisition means that customers can turn to a single company for IT infrastructure, maintenance and other services, said Klaus Kleinfeld, president and chief executive officer of Siemens AG, during a conference call to announce the deal.

Fujitsu Siemens intends to continue the restructuring efforts that Siemens AG has begun in the Siemens Business Services (SBS) group, including staff reductions, Bernd Bischoff, president and chief executive officer of Fujitsu Siemens Computers said during the conference call on Wednesday. SBS posted sharp losses during its fourth quarter and Siemens said then it would cut jobs as part of a plan to reduce costs of the unit.

Siemens, SBS' largest customer, expects to continue to rely on the services of the Product Related Services Division after the deal is completed, Kleinfeld said.

The Product Related Services Division will operate as a separate subsidiary within Fujitsu Siemens Computers. Fujitsu Siemens Computers will continue to be a 50:50 joint venture of Fujitsu and Siemens.

Also on Wednesday, Siemens announced that it sold Siemens Acceleration, an early stage venture investment company and subsidiary of Siemens Communications, to an undisclosed investor. Siemens Acceleration's portfolio includes 25 companies around the world. Siemens said it will continue to actively fund innovation through its other groups, including Siemens Venture Capital, Siemens Technology Accelerator and Siemens Technology-to-Business Center in California. Siemens Communications did not disclose the acquisition terms.

The sale of the Product Related Services Division and Siemens Acceleration are part of a larger effort at Siemens AG to reverse its trend of declining profits. In June, Siemens also sold its loss-making handset division.

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