Industrial conglomerate Siemens has sold an 80.2 percent stake in its cordless phone unit to fellow German firm ARQUES Industries AG, both companies said Friday, cementing its departure from the telephone business. The deal, financial details of which were not disclosed, will transfer the stake of Siemens Home and Office Communication Devices GmbH and amp; Co. KG to ARQUES on Oct. 1, the companies said in a joint release. SHC, which was made a stand-alone company by Siemens in 2005, produces cordless phones, as well as broadband and home entertainment devices. Revenue in fiscal 2007 was 792 million euros, and two-thirds of its sales were generated by Gigaset cordless phones. “SHC is a very solid business with sound core operations and high value-creating potential,” said ARQUES CEO Michael Schumann. “We intend to expand the company's market leadership in the premium price segment, improve its market penetration worldwide and strengthen the successful Gigaset brand.” Siemens said spinning off the unit will allow it to continue its “strategy of focusing on the three sectors: Energy, Industry and Healthcare.” ARQUES, headquartered in Starnberg, near Munich, specializes in acquiring noncore activities from companies in order to develop them into businesses with sustainable profitability. SHC is already the top producer of cordless phones in Europe and a leading supplier worldwide. ARQUES said it hoped to expand the company's position as a “market leader in the premium price segment” and focus on high-margin business. “A large number of product innovations - in the area of Voice over IP, for example - and an expansion of the company's international business are expected to generate targeted growth,” the company said. “ARQUES also intends to intensify R& D investment at research locations in Germany and Poland.” Under the terms of the deal, ARQUES can continue to market products under the Siemens brand name for the next two years. ARQUES has also agreed that it will maintain SHC's locations in Germany - Bocholt and Munich - for the next three years. SHC has 2,100 employees, locations in 17 countries, and sells its products in around 70 countries. The deal is subject to regulatory approval. Siemens shares were down 1.09 percent in Frankfurt trading to 77.90 euros ($121.32) while ARQUES shares were up more than half a percent to 7.70 euros ($11.99).
