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Siemens AG - Company Report
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Company Reports are concise reports that provide a review of the company's activities, corporate strategy and recent developments.
Siemens is a multi-faceted, multi-national company with activities in sectors as diverse as telecommunications, medical engineering, power transmission, lighting, automation, and transportation systems, as well as financing and real estate. The company’s Communications Group (formerly the Information and Communications Group) encompasses Siemens’ telecommunications operations. Through this group, Siemens develops, produces, and commercialises communications systems for fixed and mobile networks, enterprise systems, and wireless modules, and also provides related services. Siemens AG, founded in 1847, was originally a Berlin-based partnership firm called Siemens & Halske. It was later transformed into a Stock Corporation in 1897 and renamed as Siemens Aktiengesellschaft, with headquarters shifted to Munich in 1949. The company was initially a telegraphy technology firm and evolved into a multi-national company with interests in various fields including industrial automation, medical diagnostics, power generation, and telecommunications and networking. The company’s evolution is marked with numerous acquisitions including the acquisition of Telecom Plus International in 1987, the purchase of significant stake in NeoPoint in 1999, the acquisition of Efficient Networks in 2001, and the purchase of Cycos AG in April 2003. As of September 30, 2006, the capital stock of Siemens AG totalled approximately €2.7 billion, representing some 891 million no-par value shares in registered form. As of this date, Siemens shares were listed on all German Stock Exchanges, the Milan Stock Exchange and stock exchanges in New York, London and Zurich. As of October 13, 2006, members of the Managing Board during fiscal 2006 held 1,338,539 Siemens shares and stock options on Siemens shares representing 0.150% of the capital stock of Siemens AG. On the same date, members of the supervisory board during fiscal 2006 held 177,019 Siemens shares and stock options, representing 0.020% of the capital stock of Siemens AG. These figures do not include 10,607,390 shares or 1.2% of the capital stock that are held by von Siemens-Vermögensverwaltungs GmbH (vSV) - a German limited liability entity that functions much like a trust – and 39,144,979 shares or some 4.4% of the capital stock, over which the vSV has voting control under a power of attorney. Mr Peter von Siemens is authorised to vote these shares as a representative of the founder's family. On October 1 2006, Siemens Communications was restructured. The carrier business (mobile networks, fixed networks, carrier services) continued in Siemens Networks GmbH & Co KG; the Enterprise business continued in Siemens Enterprise Communications GmbH & Co KG; the Wireless Modules business continued in the Siemens Group Automation and Drives. Subsequent to this restructuring, the Siemens Networks business was merged into a joint venture with the Nokia Networks Business Group. The new company, Nokia Siemens Networks, began operations on April 1, 2007. In the future, the financials of Nokia Siemens Networks will be consolidated by Nokia and will be accounted for by the equity method by Siemens. Siemens has in recent months been subject to bribery and corruption investigations, which were ongoing as of May 2007. This began with an investigation by the Munich Department of Public Prosecution and the arrest of some former and current employees in November 2006 on suspicion of fraud, embezzlement and bribery. In December, the supervisory board said it would examine the company’s internal audit and compliance practices and retained an international law firm Debevoise & Plimpton LLP for the purpose. During the first part of 2007, the investigation broadened to outside Germany, with the authorities in Switzerland, Norway, Poland and France investigating possible antitrust violations. As of May 2007, investigators in Germany, Italy, Switzerland and the US were probing claims of bribery and corruption to the sum of some €420 million, together with the EC and Japan’s Fair Trade Commission.
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