Siemens Is Taking Over Nixdorf Computer

Electronics giant Siemens AG said Wednesday that it is taking over Nixdorf Computer AG, ending a long family reign that turned Nixdorf into West Germany’s second-largest computer manufacturer.

Siemens said it would merge its data and information technology businesses with Nixdorf in a deal that analysts estimate is worth more than $600 million.

The new Siemens-Nixdorf Informationssysteme AG would become Europe’s biggest computer maker.

Siemens, which last year won a fierce battle to buy Britain’s Plessey Co., said it would buy an initial 51% stake. This would wrest control from the heirs of Heinz Nixdorf, who founded the company in 1952 and molded it into an example of West Germany’s stunning postwar recovery.

“It’s a hard end for a family business which at the beginning was very successful,” said Reinhard Fischer, stock analyst at Banque Paribas Capital Markets Ltd. in London.

Nixdorf, once a sure bet for investors, posted catastrophic losses last year, mainly due to fierce competition and management errors.

The deal for Nixdorf, which analysts estimate at more than $600 million (1 billion marks), still needs approval from West Germany’s antitrust agency.

But industry sources say the agency has privately given the go-ahead on condition that Siemens sheds some of its telecommunications business.

The agency said no decision has been made.

Siemens is West Germany’s second-biggest company, with sales of $36 billion (60 billion marks), but analysts say it faces a tough job turning Nixdorf around.

Siemens finance director Karl-Hermann Baumann said in a television interview that the two companies’ products complement each other, giving the new firm a complete product line ranging from personal computers to the biggest industrial computers.

Analysts say that in the long term, the merger makes sense.

But the near-term could be tough, and analysts reckon Nixdorf will make a profit only in 1991 at the earliest.