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Setback for Lenovo: Fujitsu buying Siemens' stake in PC venture

Posted November 4, 2008

— Japanese electronics maker Fujitsu Ltd. is acquiring Siemens AG's 50 percent share in the companies' joint venture Fujitsu Siemens Computers for 450 million euros ($580 million), both sides said Tuesday.

The deal is a blow to Morrisville, N.C.-based Lenovo. The world's fourth-largest PC maker had reportedly been considering a deal for the Fujitsu Siemens joint venture in a move to bolster its global sales, marketing and distribution reach.

Lenovo earlier this year failed in efforts to acquire U.S.-based Gateway Computer, which went to Taiwan-based Acer. That deal and a related buy of Packard Bell in Euorpe – which Lenovo also had targeted – lifted Acer past Lenovo into the No. 3 PC-maker slot. HP is No. 1, followed by Dell.

German industrial conglomerate Siemens AG has been contemplating a sale of its half in the joint venture, which makes personal computers and laptops.

"Fully integrating Fujitsu Siemens Computers into the Fujitsu Group fits perfectly into our global growth strategy," said Fujitsu President Kuniaki Nozoe of the joint venture's reputation in the server, PC and data storage businesses.

The venture, set up in 1999, employs more than 10,000 workers worldwide, among them 6,200 in Germany with plants in Augsburg, Munich, Paderborn and Soemmerda.

"We are happy that our joint venture partner Fujitsu will acquire our stake in Futjisu Siemens Computers and will take the company to its next level of success," said Joe Kaeser, Siemen's chief financial officer.

The companies plan to complete the deal April 1, 2009, upon government approval.

Last week, Fujitsu said its profits dropped 21 percent to 4.29 billion yen ($44.2 million) in the most recent quarter as sluggish sales of personal computers and other gadgets offset growth in technology services.

The Tokyo-based company lowered its profit projection for the fiscal year, blaming an expected fall in consumer electronics purchases as the global economy slows. Like other Japanese exporters, Fujitsu's earnings have been hurt by the rising yen.

Siemens reports its third-quarter earnings later this month.

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