SIE Siemens N Ord

RNS No 8154n
SIEMENS AG
30th October 1997


Daza and British Aerospace buy Siemens Defence Electronics
----------------------------------------------------------
Group head Wiesner: Better opportunities with strong partners in global 
competition

  Siemens AG, Berlin and Munich, will sell its defence electronics unit to
  Daimler-Benz Aerospace (Dasa) and British Aerospace (BAe).  Siemens AG, BAe
  and Dasa reached agreement to this affect.  The decision followed an extensive
  bidding and negotiating phase, in which leading defence industry companies
  showed interest in acquiring the Defence Electronics Group (SI) of Siemens AG.
  The sale, subject to approval of the responsible supervisory boards and
  regulatory authorities, is retroactive to October 1, 1997.  SI president
  Helmuth Wiesner sees the move as a way to improve SI's worldwide market
  presence and secure its business over the long term. "Our successful
  cooperation with Dasa and BAe on a number of projects in the past will now be
  enhanced for the benefit of our customers.  Product and system synergies open
  new perspectives for all parties."

The European defence industry, hit by shrinking defence budgets and increasingly
tougher international competition, is being forced into a comprehensive
consolidation process. Companies are reorienting themselves through mergers and
cross-border alliances. With the sale of its SI Group to two European firms with
core defence activities, Siemens is helping secure the unit's long-term
competitiveness. The deal will help Dasa and BAe to significantly strengthen
their competitive positions. Integration of the SI activities will further
enhance their roles as vital and competent partners for their national and
international customers.

SI, with sales of nearly DM1.2 billion and some 3,800 employees worldwide (at
September 30, 1997), specializes in advanced communication systems, command and
control systems, and equipment and systems for integrated air defence. The Group
is a technology leader for defence electronics solutions. SI's headquarters are
in Munich-Unterschleissheim, a location with around 1,150 employees and the
focal point of SI activities in Germany. Dasa and BAe are leaders in the defence
industry. In 1996, Dasa's Defence and Civil Systems Business Unit posted sales
of DM2.7 billion with 8,500 employees (without military aircraft, helicopters,
and military aircraft propulsion). In its last fiscal year, BAe had 30,000
employees in the defence sector and generated sales of GBP5.3 billion.

The sale includes SI's British subsidiary Siemens Plessey Systems Ltd. with
about 2,200 employees, and Siemens Plessey Electronic Systems Pty Ltd. in
Australia, with a staff of just over 400. The sale does not affect SI's plant in
Oostkamp, Belgium, which will remain part of Siemens.

SI's German activities will initially be spun off into "SI Sicherungstechnik
GmbH & Co. KG". This unit and the Siemens Plessey companies will subsequently be
absorbed by Dasa/BAe. Dasa will take over SI activities located in
Munich-Unterschleissheim, while BAe will focus on Siemens Plessey. When the deal
is completed, the Defence and Civil Systems Business Unit of Dasa will have
Unterschleissheim as its third location, along with Friedrichshafen and Ulm.

Two former SI activities were excluded from the deal: the Air Traffic Management
(ATM) Division, with 540 employees, was previously spun off into Airsys ATM, a
joint venture with Thomson-CSF, in fiscal 1997. The Information
Security/Cryptology business sector was taken over by Siemens' Private
Communication Systems Group (PN) on October 1, 1997.

END

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