Fujitsu plans Siemens buy out

FUJITSU Ltd, Japan's largest software-service company, is close to agreeing to buy out Siemens AG's 50-percent stake in their computer-making venture to bolster its server operations, industry sources said.

Fujitsu may pay about 50 billion yen (US$515 million) to 60 billion yen, the sources said. An announcement would be made as early as next week, Bloomberg News reported.

A purchase would give the Tokyo-based company full control of Fujitsu Siemens Computers Holding BV to expand computer-server sales in Europe as the Japanese market shrinks. For Munich-based Siemens, a sale would fit into Chief Executive Officer Peter Loescher's plans to focus the German company's operations on energy, industry and health care services.

"From Siemens's point of view they should be very happy," said Michael Busse, an analyst at Landesbank Baden-Wuerttemberg in Mainz, Germany. "In this environment they can be glad to get rid of it and get money for it." Busse, estimated the stake was worth about 300 million euros (US$382 million).

Fujitsu Siemens, established by the two companies in 1999, earned 105 million euros in profit before taxes in the year ended March 31 on revenue of 6.61 billion euros, according to the company's Website. The venture employed 10,500 people as of April.

After the acquisition, Tokyo-based Fujitsu planned to sell part of the venture's personal-computer division to focus on servers that run company networks, sources said.

"While we continue to take positive forward steps in our negotiations, no agreement has been reached yet," said Etsuro Yamada, a Tokyo-based spokesman at Fujitsu.

Marc Langendorf, a spokesman at Siemens, declined to comment yesterday.