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21 September, 2018

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Siemens sells electromechanical division for DM2bn

01 October, 1999

Siemens is selling its electromechanical components (EC) division to the acquisitive US conglomerate, Tyco International, for around £660m. The sell-off is part of Siemens` large-scale restructuring operation.

The German company claims that the EC division is the world`s largest manufacturer of relays. It also makes sensors, connectors and intelligent subsystems. Last year, the division recorded a pre-tax profit of some £15m on sales of around £500m, and in the first nine months of the current financial year, it notched up sales of about £400m.

The EC division employs around 12,400 people worldwide. Siemens` chief financial officer, Heinz-Joachim Neuberger, says that the sale does not pose a major risk to these jobs, but Tyco has a record of shedding jobs when it acquires companies. In the past year it has bought AMP, Raychem and Elcon Products, and laid off more than 10,000 of their employees. At Raychem, for which Tyco paid $3bn, almost a quarter of the workforce is being made redundant.

Tyco chairman Dennis Kozlowski says the Siemens division is "an excellent fit" with Tyco`s electronics business. The relay products, in particular, "are highly complementary to Tyco Electronics` connectors and interconnect products".

The sale has to be approved by the regulatory authorities.




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