Taiwan-based BenQ Group will acquire Siemens' entire mobile phone business with more than 6,000 employees worldwide. The business will be headquartered in Munich.

The closing of the deal is expected in the fourth quarter of Siemens' fiscal year 2005.

"With this partnership, we have found a sustainable perspective for our mobile phones business. BenQ and Siemens complement one another ideally. We will be uniting our strengths with BenQ's highly successful consumer business. In addition, we also complement one another perfectly in terms of geography. This will give BenQ, which up until now has been very strong in Asia, access to the European and Latin American markets where we hold leading positions," said Klaus Kleinfeld, the CEO of Siemens AG.

Siemens will invest in BenQ by purchasing shares of the company. In addition, the transaction also includes the rights to the brand and name, which BenQ will be allowed to use for a total of five years.

With this acquisition, BenQ will advance to become one of the world's leading mobile phones vendors. The two partners complement one another ideally in their strengths. In addition to its GSM mobile phones activities, the Taiwan-based company is also a leading vendor of consumer electronic products, such as LCD screens, notebook computers, cameras and scanners. The acquisition will strengthen BenQ's GSM mobile phones business. BenQ intends to expand mobile devices into a core business in the future.

On its Asian home market, BenQ already numbers among the fastest-growing vendors in the mobile phones segment. The partnership with Siemens will enable BenQ to implement its ambitious plans for international expansion. Siemens offers BenQ a globally operating organization that enjoys leading market positions in both Western and Eastern Europe as well as in the growth market of Latin America. Through the acquisition, BenQ will also obtain a world-famous brand name, mobile telephony technology and software competence, as well as global access to Siemens' broad customer base. Moreover, BenQ will also acquire Siemens' outstanding manufacturing operations on three continents.

The two companies have agreed to partner closely. In the course of the transaction, Siemens will acquire new BenQ shares worth EUR 50 million and will be building upon BenQ as a preferred partner for end-to-end mobile communication solutions.

The Supervisory Board of Siemens AG, Berlin and Munich, and the Board of BenQ have agreed to the transaction. The agreement remains subject to approval by a shareholders' meeting of BenQ.