Munich, July 6 (Bloomberg) -- Siemens AG, Germany's largest
electronics and engineering company, said it may sell shares in
its computer chip unit, Infineon Technologies AG, in October on
German and U.S. markets.
Siemens, which will initially sell between 25 and 49 percent
of the unit, had said earlier it would sell shares in Infineon
between October and March. Analysts estimate Infineon is worth 10
billion to 20 billion deutsche marks ($10.45 billion), a value
that Ulrich Schumacher, who heads the unit, said was not
''completely off.'' The exact date of the listing hasn't been
set.
''They should go ahead with the sale as quickly as
possible,'' said Theo Kitz, an analyst at Merck Finck & Co. in
Munich, who reiterated his ''outperform'' recommendation for
Siemens today. ''At the moment, the outlook for the semiconductor
industry is good, allowing the company to ask for more money.''
Infineon was broken off into a separate division in April
and its sale is part of Siemens' reorganization, which took on
renewed urgency after the company said fiscal 1998 profit rose
just 2 percent. Siemens has promised to shed lackluster units
accounting for 15 percent of sales, and to rid itself of
businesses that can't rank among the top three in their field.
Setting Date
Infineon will ''largely'' be free of debt when it will go on
the market, Schumacher said. While the date for the listing
hasn't been set, Infineon will be ready to list shares on the
market in October, said Chief Financial Officer Peter Fischl.
Siemens also will sell shares in its components joint
venture with Matsushita Electric Industrial Co. by the first
quarter of next year.
While Infineon didn't specify which stock exchanges it
picked for its shares, Siemens in May had said the shares will
either trade on the New York Stock Exchange or the Nasdaq market.
The company hasn't decided yet whether a capital increase
will be part of Infineon's share sale. Goldman, Sachs & Co. and
Deutsche Bank AG are leading the group managing the sale.
Schumacher said he is ''restrained optimistic'' Infineon
will turn to a profit in fiscal 1999 after posting a loss of 1.2
billion marks a year earlier. The unit also plans to exceed the
market's growth in coming years, Schumacher said, adding that the
unit's segments are open to alliances. Still, Infineon doesn't
plan to enter a partnership before the share sale.
Narrowed Loss
The unit narrowed its operating loss to 104 million marks in
the six months ended March 31. In 1998, it had a loss of 852
million marks.
The improvement in Infineon comes as Siemens shifts its
focus toward higher-margin chips for the telecommunications and
automotive industries to protect itself from the volatility of
the memory chip market.
Infineon's sales rose 13 percent to 3.8 billion marks in the
first half of fiscal 1999 and orders advanced by 16 percent as it
benefited from a rebound in the chip market after oversupply
caused price declines of as much as 60 percent last year.
Siemens shares rose as much as 0.85 euro, or 1.08 percent,
to 79.6 euros. |
