The head of Siemens Information and Communications business today slammed the high prices being paid for networking companies, saying many companies are massively overvalued.
Siemens is itself looking for partners to expand its newly created Information and Communications business, but head of the division Volker Jung told reporters at a showcase event in Berlin today that no mega mergers are in Siemens' pipe line.
"For all our partnership activity - be it acquisition, venture capital, joint venture or divestment - we will keep a strict eye on shareholder value," said Jung, "We're not going to make any overvalued acquisitions."
Siemens is trying to reposition itself as a networking provider, according to Jung. "This goal is ambitious, but realistic. Our goal isn't a new idea, we're well on the way there already," he said.
"I'm not willing to pay an unbelievable amount of money for companies. If you look at what's happening to the market, you can see that companies are by far overvalued," he said.
Referring to Lucent's $20 billion of Ascend last month, Jung said paying such high prices that are well above the company's turnover, "doesn't make sense."
The new Siemens business, which combines the old Siemens Nixdorf and the core company's private and public telecommunications equipment businesses, comprises three segments with combined sales of over DM50 billion.
IC Products includes mobile phones, ISDN, PCs and banking and retail systems. IC Networks provides network infrastructure equipment, and Siemens Business Services - the smallest of the segments - provides service and support.
"We want each segment to be world leading, but prefer teaming rather than mega mergers at overblown prices," said Jung.
Siemens will be making partnership announcements later this month, according to Jung. Siemens will also be expanding its existing networking partnerships with 3Com and Newbridge Networks.
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