Mannesmann and Siemens Activities to Become Leading Systems Supplier
20 March 2000
Atecs Mannesmann and Siemens Pool Automotive Activities to Become World-Leading Systems Supplier for High-Tech Electronics
DUESSELDORF, Germany, March 20 Atecs Mannesmann AG,
Duesseldorf, and Siemens AG, Berlin/Munich, are pooling their automotive
systems businesses in a joint venture to become the world's leading supplier
of high-tech electronic systems. Atecs Mannesmann, Mannesmann AG's automotive
systems and industrial arm, which is slated for public listing this June, is
contributing all the activities of Mannesmann VDO. Siemens is contributing
its entire Automotive Systems Group. Each partner will retain a 50-percent
stake in the joint venture, to be called Atecs Siemens Automotive AG. The
automotive industry supplier will have sales of some 7 billion euros and a
worldwide workforce of about 50,000 employees. The new company will begin
operations, subject to approval of the responsible boards and antitrust
authorities, on July 1, 2000.
Mannesmann VDO and Siemens' Automotive Systems Group are jointly
strengthening their competency in key technologies to lay the basis for
further profitable growth. The two companies are an ideal fit and will create
the world leader in the areas of driver information, cockpit systems and car
communication. Atecs Siemens Automotive will also hold leading positions in
the fields of powertrain, body electronics and safety electronics. The new
company's strengths in these fields lie in engine management and fuel systems,
in airbag and ABS systems as well as access and immobilization systems. The
VDO brand, combined with Siemens, will be given even greater standing in the
field of automotive electronics. The move will enable Atecs Siemens
Automotive to improve its positioning as a high-performance, international
partner for the car industry and stay at the forefront of innovative
developments.
The new systems supplier intends to double its business volume to
14 billion euros within five years. By consolidating its resources, primarily
in R&D, procurement, production and sales, the company expects an additional
middle-term earnings potential of some 400 million euros a year.
"The formation of Atecs Siemens Automotive represents yet another decisive
step in our strategy to strengthen the global competitiveness of our
businesses by positioning them among world market leaders," noted Siemens
President and CEO Heinrich v. Pierer. "Together we will create a focused
product portfolio concentrating in particular on complete modules and systems.
This will give us the basis for above-average growth in an increasingly
competitive market."
Klaus Esser, CEO of Mannesmann, added: "The joint venture will
considerably strengthen Atecs Mannesmann's automotive activities. A rounded
product portfolio and a strong market position in the fast-growing field of
automotive electronics will provide an excellent springboard for exploiting
growth opportunities. This joint venture will offer investors a chance to
participate in the development of an excellently positioned world market
leader when Atec Mannesmann is floated in June."
The new company will be headed by Franz Wressnigg, presently head of
Siemens Automotive. Chief Financial Officer will be Johann Loettner, who is
currently CFO of Mannesmann VDO. Both Mannesmann and Siemens will consolidate
the joint venture at equity.
In fiscal 1999 (ended September 30), Siemens' Automotive Systems Group,
employing 27,000 people at over 80 locations worldwide, increased its business
volume 15 percent to 3.3 billion euros. Nearly 409 million euros -- over
12 percent of sales -- are spend on research and development.
Mannesmann VDO showed a 10-percent increase in sales to 3.5 billion euros
in fiscal 1999. The company has around 24,000 employees at 66 locations
around the world. VDO invested 335 million euros in research and development.