Japanese electronics conglomerate Fujitsu Ltd will buy Siemens AG's 50% stake in their computer joint venture for €450 million ($567 million), aiming to boost its presence overseas.
Fujitsu said it hoped the acquisition would help it gain ground against International Business Machines and Hewlett-Packard, which currently dwarf it in computer server markets in Europe, the Middle East and Africa.
The deal is also expected to allow Siemens, which has been spinning off non-core business, to focus more resources on its power, energy and health services at a time when the global financial crisis could crimp demand for computers.
Siemens said it would book a €310 million profit from the deal when it closes in April.
“We would like to compete with IBM and HP but even after this acquisition we are not at a level where we can put up a fight,” Tatsuo Tomita, a corporate senior executive vice president at Fujitsu, told a news conference in reference to servers.
“We currently have a single-digit share of the market, and want to take that to double digits.”
The venture, Fujitsu Siemens Computers Holdings (FSC), is Europe's biggest maker of personal computers and employs about 10,500 worldwide, a majority of which are in Germany.
Fujitsu said it had no plans for any job cuts.
It also said it has not made any decisions about FSC's consumer PC business, which generates about 20% of the company's sales. There have been media reports that Fujitsu would pull out of the business after the acquisition.
Slow sales of PCs at the FSC venture was one factor behind Fujitsu cutting its profit forecasts last week.
Fujitsu President Kuniaki Nozoe said he aimed to bring FSC back to profitability in the business year starting next April, following an expected net loss of €100 million in the current year to March.
Fujitsu has been seeking growth overseas and in the information services sector given the weak prospects for the mature Japanese market and sluggish sales of microchips, hard drives and mobile phones.
It launched a hostile bid for French computer services firm GFI Informatique last year. That deal fell through after management demanded a higher price. (Reuters)