Siemens AG ended the speculation over the future of struggling Nixdorf Computer AG by announcing that it would be taking a 51% controlling stake in the Paderborn distributed systems manufacturer. It will subsequently merge its computer interests with those of Nixdorf to create a new Siemens-Nixdorf Informationssysteme AG, with combined annual turnover of some $7,000m, shooting Siemens up the world league of computer companies, putting it close in size to Hewlett-Packard Co in computers. The transfer of Siemens Data assets to the new company will raise Siemens’ stake to between 70% and 80%. The acquisition is a remarkably good one for Siemens, almost as good as acquiring a major US company, because Nixdorf has been much more ambitious geographically than Siemens Data Systems: Siemens has only a vestigial computer presence in the UK, but now has a strong marketing base for its products. And where Siemens has largely confined its computer business to continental Europe, Nixdorf is a major player in Australia, Hong Kong and Singapore, has a small presence in Japan, and is the only European computer manufacturer to establish a US business of any size – Nixdorf does between $100m and $200m a year in the US, and has a couple of enormous retail point-of-sale system contracts there. The two computer businesses are also a fairly good fit, because Siemens is still primarily a traditional mainframer but has built a strong presence at home right at the bottom end of the Unix market, so that Nixdorf fills its relative weakness in the mid-range of its product line, where Nixdorf is moving its proprietary 8870 small business computers with medium and high-end Unix machines as quickly as it can. It is also strong in banking and retail terminal systems where Siemens has little presence. Siem-ens is taking 51% of the ordinary share capital: these voting shares are currently 25% owned by the Nixdorf family and 70% by two charitable trusts controlled by the family and Nixdorf management. Nixdorf said that the quoted preference shares are unaffected by the agreement and will remain publicly traded. Karl-Heinz Baumann, Siemens’ chief financial officer said his company didn’t plan to guar-antee future dividend payments on the preference shares, adding that Siemens wouldn’t mind if Nixdorf’s preferrence shares were to be converted into ordinary shares, as would be required after two years of no dividend. The agreement is subject to West German Kartel Office, which says it will take about four months to rule, and the European Commission, miffed that it had been given no prior notice, said it would also have to approve the agreement.
