FUJITSU SIEMENS COMPUTER

Fujitsu Siemens Computer

Fujitsu Siemens Computer

Question 1:

The impact of differing negotiating styles on the initial agreement

Fujitsu has agreed to acquire Siemens' stake in their European computer joint-venture, Fujitsu-Siemens Computers. Under the deal Fujitsu will pay approximately €450m for the 50 percent stake. The deal is scheduled to close on April 1 at which time the company will become a wholly-owned subsidiary of Fujitsu. Until then it will continue to be run as a joint venture. Fujitsu-Siemens Computers was established in October 1999 and became one of the biggest PC vendors in Europe. Today it operates in 36 countries and in its last financial year rang up sales of €6.6bn and a pretax profit of €105m. (www.websters-online-dictionary.org) But PCs have been moving towards the periphery of Siemens' operations as it focuses more on energy, industrial and healthcare IT systems. (Maani, 2004, 21-48)

The joint venture agreement under which the company was run was due to expire in October next year, ten years after the company began operation and earlier this year Siemens began discussions with Fujitsu with a view to ending the partnership.

Those discussions culminated in the deal that was announced today. Mid-term prospects for the company are unclear. PC makers operate in a tough and fast moving market but Fujitsu has managed to hold on to a top-two position in Japan for most of the last decade. In Europe, PC shipments are forecast to continue growing from an anticipated 69 million this year to 91 million in 2012 but new entrants, especially companies like Asus with its popular Eee PC, are crowding the market and giving more established companies a run for their money. Fujitsu is considering a major restructuring of Fujitsu-Siemens once the acquisition is complete, according to some press reports, and that drew fierce opposition from Bernd Bischoff, who was CEO of the company until today. (Maani, 2004, 21-48) According to company Bischoff had resigned for personal reasons, a sign reports about his disagreement with Fujitsu may have been accurate. Kai FLore, who is currently chief financial officer at the company, will replace Bischoff. (www.websters-online-dictionary.org)

"Fully integrating Fujitsu Siemens Computers into the Fujitsu Group fits perfectly into our global growth strategy.”We're inheriting a strong customer base in EMEA (Europe, Middle East and Africa) and an R&D capability that can support our global products development -- not to mention a tremendously talented group of employees who share our values and commitment to grow with our customers as their trusted business partner." (Maani, 2004, 21-48)

Japanese electronics concern Fujitsu is to take over full control of the Fujitsu Siemens Computers joint venture, according to Japanese media reports on Saturday. Fujitsu and Munich-based Siemens AG had owned 50 per cent each of the computing firm, which was established in 1999. Fujitsu is to make Siemens' share of the firm its own subsidiary, according to well-informed sources speaking to the Japanese business paper Nikkei. The agreement is expected to be formally announced early next week, with the price paid by Fujitsu anticipated to be around ...