EU OK's Taiwan Co BenQ To Buy Siemens Mobile

BRUSSELS -(Dow Jones)- The European Commission Thursday cleared Taiwanese electronics manufacturer BenQ Corp. (2352.TW) to buy the mobile phone unit of German electronics and engineering group Siemens AG (SI).

In a statement, the Commission said the "transaction has no harmful effect on competition in the European Economic Area as regards branded mobile telephones."

Although Siemens has a large market share in some European countries, BenQ does not.

"After the proposed merger BenQ will continue to face competition from strong, well-established competitors" such as Nokia Inc. (NOK) and Samsung Corp. (000830.SE).

No competition problems were found in the markets for accessories, spare parts and related services because BenQ has an even smaller European market share in these areas, the Commission said.

Siemens offloaded its mobile phone business to BenQ Corp. in June. The Munich-based company, which has long sought a solution for its unprofitable mobile phone unit, gave the business to BenQ for free and will also buy EUR50 million of newly-issued BenQ shares, giving it a 2.5% stake based on the current price.

BenQ will be able to use Siemens' brand name for five years, and the deal will close in the fiscal fourth-quarter ending Sept. 30, Siemens said.

The E.U. applied its simplified antitrust procedure to the deal. This clears mergers or acquisitions after one month if no objections are raised by third parties.

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Posted to the site on 8th September 2005