Taiwan's BenQ won permission from the European Commission on Thursday to take over Siemens' mobile-phones unit, catapulting the technology group into the world's top 10 mobile handset vendors.
"After examining the operation, the Commission concluded that the transaction would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it," the Commmission said in a statement.
The German engineering giant has lost hundreds of millions of euros on its mobile telephone unit.
In return, Siemens will acquire a 2.5-percent stake in fast-growing BenQ, Taiwan's top maker of computer equipment and mobile phones, via 50 million euros worth of new BenQ shares.
BenQ will use the Siemens brand name for up to five years and will take over several high-profile sports sponsorship contracts, including one with star soccer team Real Madrid.
It will also take on 6,000 Siemens employees - half of them in Germany, where many have job guarantees until 2006 - along with all of Siemens' development and manufacturing sites in Manaus, Brazil and Kamp-Lintfort, Germany.
The company's headquarters will remain in Munich, Germany.
"With this partnership we have found a sustainable perspective for our mobile phones business. BenQ and Siemens complement one another ideally," Siemens Chief Executive Klaus Kleinfeld said when the deal was announced on June 7.
The German company will invest 250 million euros in the struggling business before handing it over to BenQ and will write down 100 million euros worth of products that are to be discontinued, Kleinfeld said.
The unit - Siemens' only remaining consumer business in a portfolio that stretches from turbines to trams - brought in 5 billion euros of sales of Siemens' total of 75 billion last fiscal year, but made an operating loss of 152 million euros.
BenQ said the deal would help it to become the world's fourth-biggest mobile-phone vendor - a position occupied by Siemens until last year.
It has since been overtaken by LG Electronics and Sony Ericsson.
The Taiwanese company, which also makes consumer-electronics products such as cameras and scanners, will gain instant access to Siemens' strong market positions in Europe and Latin America, to complement its strength in Asia, and to new technology.
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