Topic: Siemens Mobile Acquisition by BenQ

Source: Taiwan Central News Agency
Time: June 11, 2005
Title: "Siemens Factory Workers Concerned about BenQ's Recent Acquisition"

Background information:

• BenQ Group announced June 7 the acquisition of Siemens AG's Mobile Devices Business and said that the acquisition will create the world's fourth largest handset maker as well as the
  largest mobile phone technology company in Greater China, bringing BenQ's combined annual revenue to US$10.9 billion.
• BenQ Group is currently comprised of ten companies and five main business groups and units to produce various products in the fields of display and imaging, networking and communications, digital computer and storage business, but in the eyes of German consumers, the group is only a LCD panel maker and is not a familiar brand to them.

Reaction by the Siemens employees:

• There are 1,800 employees working at the mobile phone factory of Siemens AG in Kamp-Lintfort, a small town of just over 40,000 people in Germany

• George Nassauer, president of the Union of Siemens AG, told the Central News Agency bluntly in a telephone interview that the workers do not want to join BenQ Group because they do not know the new owner of the factory. The workers are also worried about job security, he added.
• A German weekly reported recently that the factory is brimming with an atmosphere of fear, anger and sadness over news of the sale to BenQ.
• Another concern of the factory employees is that German media have reported that BenQ just wants to use the Siemens AG's brand to gain a foothold in markets in Europe and Russia and that mobile phone products with the Siemens brand will eventually disappear once the
  Taiwanese group achieves its goal.
  • A German daily also revealed recently that the name of Siemens AG's Mobile Devices Business will be changed to BenQ Mobile Devices in the future, showing that the Taiwanese group is not interested in the German electronics giant's brand name.

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Source: NewsWeek
Time: June 12, 2005
Title: "TECHNOLOGY: Making New Connections"
Authors: Jonathan Adams

When the news broke last week that the German conglomerate Siemens would hand over its flailing cell-phone division to BenQ, the response from many was: Ben who? The deal is all about raising the profile of BenQ, a Taiwanese manufacturer of laptops, cell phones, computer monitors and other devices. Chinese firms like Lenovo and TCL have been cutting big deals in an effort to build global brands, and BenQ's agreement with Siemens is the boldest move yet by a Taiwanese firm to follow suit.

Taiwanese firms already lead the unsung market for building the tech gadgets on which Western and Japanese brands glue their labels. But now, spurred by falling margins, a few Taiwanese companies are trying to break out of the subcontractor's ghetto. In 2001, BenQ was spun off from Acer, which has since become a leading name for laptops and PCs in Europe. Asustek, the world's top maker of motherboards, is now selling laptops and phones under its own brand. But BenQ is the first Taiwanese firm to reach for global renown by taking over a major Western name. The deal will more than double BenQ's annual revenues and vault it into the top 10 cell-phone vendors.

That's not to say the strategy will work: analysts tend to doubt that Taiwanese firms have the marketing savvy to build global brands, which is exactly what they say about China. They also point out that this particular deal brings together two companies with falling sales in a union ripe for culture clashes between cost-cutting Taiwanese and unionized Germans. The fact that Siemens actually agreed to pay BenQ 300 million euro to take over its business roused the suspicion of Steven Tseng, an analyst at Yuanta Core Pacific Securities in Taipei. "You can't help but wonder if the seller considered this piece of property worthless," he says.

Still, BenQ chairman Lee Kun-yao boasted that the new company would turn a profit in two years. Even skeptics like Tseng called the deal a "quantum leap" toward establishing BenQ as a well-known brand. Whether it works or not, BenQ is now an interesting name to watch.

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Source: Taiwan Central News Agency
Time: July 15, 2006
Title: "BenQ creating Win-win situation after acquiring Siemens MD"

Summary: The Siemens MD acquisition gives BenQ access to advanced German research, production, and technology

BenQ view of the acquisition:

• Jerry Wang, chief marketing officer of BenQ Corporation, said just by looking at the phone, the sophistication and precision of German technology could be observed, as well the country's rigorous scientific research and its mastery of metal and other natural materials. Munich, the capital of the German State of Bavaria, is one of Germany's leading information technology and science research centers, housing one of the best universities for industrial science as well as the world-renowned BMW factory, Wang noted.
• Asked about reports of BenQ facing great losses when it hired more than 1,000 high-paid German workers, the executive said "no money can buy the valuable expertise and know-how of experienced German engineers when it comes to quality control and improving the production process."
• "Now, these all belong to BenQ," Wang said with pride.
• Because German engineers dominate in the power of scientific analysis, and are able to suit their methods to the situation in order to speed up the production process, for example, or make high-end cellphones in a short period of time, to BenQ Mobil, the German factory controlling powerful production technology is its locomotive for mass production, Wang said, explaining that the factory works out a model manufacturing process for each new product for their other plants around the globe to follow.
• The acquisition is a "mutually beneficial" marriage of BenQ's successful consumer electronics background and Siemens' technological expertise in mobile devices, while Siemens has good connections with telecommunications businesses and BenQ is good at marketing.