German conglomerate Siemens is looking to end its participation in its joint venture with Japanese giant Fujitsu, according to The Wall Street Journal, citing people familiar with the matter.
The joint venture, Fujitsu Siemens Computer, did US$10.3 billion in sales last year, but Siemens CEO Peter Loscher reportedly isn't pleased overall with the performance of FSC, which never found a real foothold in the US in the face of competition with Hewlett-Packard and Dell.
"We have said that we want to focus on the three sectors - industry, energy, health care - and that we want to concentrate on them," a spokesman for Siemens told Forbes Wednesday in the US.
Following a bribery scandal last year, Siemens is looking to increase its profitability and has recently shed several assets, and announced plans to lay off 4 per cent of its workforce.
But Fujitsu may not be all that disappointed. In a Tuesday news conference, Fujitsu President Kuniaki Nozoe said that mobile phones were going to be a more profitable business than PCs. That could mean it may not be interested in acquiring Siemens' 50 per cent stake in the venture, for which it has right of first refusal.
FSC, which was founded in 1999, wasn't able to take advantage collectively of the companies' individual strengths in Europe and Asia, respectively, and subsequently "foundered on the shoals of a capricious and rapidly evolving IT market," said analyst Charles King of Pund-IT in a research note Wednesday in the US.
The Journal quoted a banker who said the nine-year-old joint venture could be valued at between US$3.12 billion and US$4.65 billion.
