Technology News
02/22 03:50
Siemens to Buy Efficient Networks for $1.5 Billion
(Update1)
Munich, Feb. 22 (Bloomberg) -- Siemens AG agreed to buy Efficient Networks
Inc., the largest maker of modems for high- speed Internet connections on
telephone lines, for $1.5 billion in cash to expand its phone equipment business in
the U.S.
Germany's biggest electronics company offered $23.5 for each Efficient Networks
share, about 90 percent more than yesterday's closing price. The board of
Dallas-based Efficient Networks backs the transaction, Siemens said.
This is the ``right step at the right time, especially now that technology prices have
become more sensible,'' Siemens Chief Executive Heinrich von Pierer said in an
interview on Bloomberg Television.
Siemens has sold divisions accounting for 15 percent of sales in the past two years
to focus more on faster-growing industries such as mobile phones. Von Pierer has
also pressed to expand the company's U.S. business, and has said Siemens will use a
March 12 U.S. listing to finance further acquisitions.
``Siemens is delivering on its promises,'' said Michael Bahlmann, an analyst at
M.M. Warburg Research in Hamburg. ``Von Pierer is guiding the company with
a steady hand.''
Siemens shares fell 0.61 euros to 132.89 today.
Siemens sells digital subscriber line equipment, which moves data on copper phone
lines at speeds more than 100 times faster than dial-up modems, to end customers
and phone companies such as Deutsche Telekom AG, Europe's largest phone
company by sales. It's had difficulties in recent months satisfying demand for
high-speed Internet connections.
Efficient Networks had sales of $394 million in 2000, Siemens said. The company's
shares have slumped 70 percent in the past six months as telecommunications
stocks fell.
Siemens's U.S. sales rose 35 percent to 4.4 billion euros in its fiscal first quarter
ended Dec. 31, boosted by acquisitions and the euro's slide against the dollar, the
company said last month. International business accounts for 77 percent of sales. |
