CEAG AG sells its business unit FRIWO Mobile Power
Ostbevern (euro adhoc) -
-Flextronics acquires the mobile telephone power supply and charger business unit (FMP) - CEAG to focus on the fast growing FRIWO Power Solutions business unit (FPS)
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merger, acquisition and takeover/merger, acquisition and takeover
CEAG AG (FSE: CEA), a leading international manufacturer of power supplies and chargers, has agreed to sell its FRIWO Mobile Power (FMP) business unit to a subsidiary of Singapore based Flextronics International Ltd. (NASDAQ: FLEX). An agreement to this effect was signed today. Flextronics is a leading Electronics Manufacturing Services (EMS) provider with sales of US$ 30 billion in 2007, focused on delivering complete design, engineering and manufacturing services to OEMs. FMP will become part of Flextronics´ components business unit Vista Point Technologies, which designs, builds and markets refined microsystems for end users, including camera modules, antennas, radio frequency (RF) modules, and thin film transistor (TFT) displays and power supplies.
The purchase price amounts to EUR 57.5 million on a cash-free/debt-free basis and is subject to customary working capital adjustments which could reduce the net proceeds CEAG will receive. The transaction is subject to the approval of the competent antitrust authorities and other customary closing conditions and is expected to close during the first half of 2008.
FMP, one of the world´s largest manufacturers of power supplies and chargers for mobile telephones, generated third party revenues of EUR 177.4 million in the first nine months of 2007. The three production plants in China, the two design centers in Germany and China and the remaining FMP offices in Korea, North America, Brazil, India and Germany employ more than 16,000 personnel. All FMP employees worldwide, including the 39 FMP employees at the Ostbevern facility, will continue with FMP following the transaction. Another 233 staff are employed by CEAG AG / FPS in Ostbevern.
Following the acquisition of FMP, Flextronics will support FPS, through an EMS partnership whereby the Vista Point Technologies business unit will provide manufacturing services for FPS that are currently sourced from FMP. CEAG AG will retain the rights to use the FRIWO brand after the consummation of the transaction.
Background to the sale The competitive environment amongst the mobile phone suppliers has intensified due to the entry of new market participants and has therefore increased pricing pressure. Against this background the CEAG management board carefully analyzed strategic options and made the decision, which was approved by the supervisory board, to sell the FMP business unit to Flextronics.
The acquisition of FMP by Flextronics is expected to generate considerable synergies and will enable FMP and Flextronics to further meet the requirements of their global customer base. With FMP's integration into Flextronics, FMP will have access to substantial resources, such as worldwide manufacturing locations, and Flextronics will expand its customer portfolio.
CEAG AG´s future strategy Following the sale, CEAG AG will focus on the continued development of the FRIWO Power Solutions (FPS) business unit, which is experiencing strong growth. FPS operates with power supplies and chargers for IT and communication, household appliances and power tools, industrial applications and medical technology.
The FPS business unit has recorded strong growth in recent years and has seen profitability rise considerably. In 2006, FPS´ revenues increased by 25% to EUR 79 million, with EBIT reaching EUR 3.5 million. FPS generated EUR 63.3 million in revenues in the first nine months of fiscal year 2007, which represents growth of 11.6%. EBIT rose to EUR 3.9 million in the same period, an increase of almost 50% compared to the corresponding period in the previous year.
Rolf Endress, CEO of the Management Board of CEAG AG: "Selling FMP now is a strategically and economically sound decision and is in CEAG´s best interest. We have carefully analyzed the opportunities and risks for FMP and have come to a clear conclusion. FMP rose to global market leadership as a part of the CEAG Group. We believe that, as part of Flextronics, the FMP business unit will continue to develop positively in a challenging competitive environment. CEAG will now focus all its energy on further building the FRIWO Power Solutions business unit."
Further information: CEAG AG, Gudrun Richter, Investor Relations Tel.: +49 - 2532 - 81 158 eMail: richter@friwo.de
CEAG AG CEAG AG, General Standard listed, has its registered office in Bad Homburg, Germany, and its headquarters in Ostbevern, Westphalia, Germany. CEAG AG is the holding company of the two FRIWO business units. The FRIWO Mobile Power (FMP) business unit operates in the mobile communication market and is the world´s leading manufacturer of chargers for mobile telephones. The FRIWO Power Solutions (FPS) business unit manufactures custom-made power supplies and chargers for the four segments of IT and communications, power tools, industrial applications and medical technology. CEAG AG/FRIWO Group is present in all major world markets, with state-of-the-art development centers, production and sales in Europe, Asia and North and South America. CEAG AG´s principal shareholder is DELTON AG, holding almost 77% of its capital.
DELTON AG DELTON AG is a holding company headquartered in Bad Homburg, Germany. With its divisions Pharmaceuticals, Household Products, Logistics and Power Supply, it manages the value-creating investment and entrepreneurial activities of its sole shareholder Stefan Quandt. DELTON AG is active in clearly defined markets offering future growth in which its divisions already hold or are intending to achieve leading positions on an international scale. With a workforce of more than 32,000 employees, the DELTON Group generated sales of around EUR 2.6 billion in fiscal 2006.
end of announcement euro adhoc
Further inquiry note:
Gudrun Richter
Investor Relations
Telefon: +49 (0) 2532-81-158
E-Mail: richter@friwo.de
Branche: Semiconductors & active components
ISIN: DE0006201106
WKN: 620110
Index: CDAX
Börsen: Börse Hamburg / free trade
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