German engineering giant Siemens is selling its mobile phones unit to much smaller Taiwanese rival BenQ, it said on Tuesday, drawing a line under hundreds of millions of euros of losses.
The deal — which will cost Siemens 350 million euros ($431 million) before tax — will enable BenQ to double its annual revenues to $10 billion, the company said, and catapult it out of relative obscurity into the world’s top 10 mobile handset vendors.
BenQ will use the Siemens brand name for five years and will take over some high-profile sports sponsorship contracts, including one with star soccer team Real Madrid.
It will also take on 6,000 Siemens employees — half of whom are in Germany, where many have job guarantees until 2006 negotiated last year in exchange for longer working hours.
The company’s headquarters will remain in Munich, Germany.
In return Siemens will acquire a 2.5-percent stake in fast-growing BenQ — Taiwan’s top maker of computer equipment and mobile phones — with the issue of 50 million euros worth of new BenQ shares.