Continental Buys VDO
July 25, 2007
US firm TRW had challenged for VDO, but Siemens appears to have been swayed by Continental's argument that German technology should not be put into foreign hands. The fee of 11.4 billion euros ($15.7 billion) for the subsidiary may have also been a factor in Siemens' decision.
The decision to sell within Germany is certain please German politicians who were strongly against VDO going to a foreign firm and have recently floated the idea of placing limits on foreign investment in Germany's "core" business branches.
Politicians in favor of Continental bid
Last week, Christian Wulff, the conservative premier of Lower Saxony, spoke publicly about his support for Continental's bid for VDO.
"We want Conti and VDO to merge, then there would be a large automotive parts supplier operating throughout the globe out of Germany," Wulff told German regional public radio station NDR.
"It would look a lot worse for the employees of the automotive supplier division of Siemens if international financial investors got their hands on technology, jobs and production plants here," Wulff added.
Foreign interest reignites protectionism debate
The situation with VDO reignited the debate within the German government over whether Germany needed an industrial policy modeled on the French to protect key industries from the influence of foreign investors.
German Economics Minister Michael Glos has said that his department was looking at how other European nations protected their domestic industries, though he added that he did not want Germany to be a forerunner when it came to protectionism.
Siemens swoops to buy US company
Meanwhile, Siemens looked to be directing some of the cash raised by the prospective sale of VDO towards the United States Wednesday as it announced it had agreed to pay 5.09 billion euros for Dade Behring Inc., a clinical laboratory diagnostics company based in Deerfield, Illinois.
The Munich-based giant issued a statement saying it had signed a merger agreement with Dade Behring to acquire all of its outstanding shares at 56.03 euros apiece. The deal is subject to regulatory approval but is expected to be completed by the second quarter of fiscal 2008.