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Siemens, Fujitsu talk PCs
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June 16, 1999: 11:50 a.m. ET
Unions: German, Japanese companies to merge PC operations
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LONDON (CNNfn) - Computer makers Siemens of Germany and Fujitsu of Japan are in talks to combine their personal computer operations, German labor unions told Reuters Wednesday.
The unions indicated the companies are likely to combine the units, although a Siemens official in Munich refused to comment on what he termed "market speculation."
A combined Siemens-Fujitsu would be the second-largest PC maker in Europe behind Compaq (CPQ), Reuters reported.
Analysts welcomed the possibility of a deal. "We know Siemens has an underweight (PC) business on a global scale," said one London-based analyst who spoke on condition of anonymity. "In this business you need to be big."
Siemens wanted to sell its PC manufacturing business to Taiwan's Acer last October, but that deal apparently fell through after months of negotiations when the Taiwanese company wanted to adjust the purchase price.
"This is a considerably under-performing asset, with several billion marks in revenue," said another analyst, who also did not want to be named.
Brokers suggested any deal would take the form of an outsourcing agreement, allowing Fujitsu to manufacture PCs more efficiently than Siemens, although the computers would still be marketed under the Siemens brand.
Siemens last year launched an enormous restructuring plan aimed at shedding its lower growth units, and focusing on its more exciting business opportunities.
Siemens shares rose almost 2 percent in Frankfurt Wednesday to 70.70 euros.
-- from staff and wire reports
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