Sanmina-SCI To Buy Three Plants From Siemens

As technology companies increasingly look to sell plants and outsource
manufacturing, Sanmina-SCI Corp. continues to prove a
willing buyer and supplier. The San Jose, Calif.-based electronics
manufacturer announced a deal today to buy three facilities from fixed-line
telecom equipment company Seimens Information and Communication Networks (IC
Networks) .

Under terms of the deal, Sanmina-SCI will take over IC Networks’ Lake Mary,
Florida manufacturing plant, which makes wireline communications switching
products, and two unspecified manufacturing plants in Europe. The deal also
includes a multi-year manufacturing agreement. Financial details were not
disclosed.

“We believe this transaction, which strengthens our relationship with
Siemens, reflects the success of our OEM partnership,” Jure Sola, Chairman
and CEO of Sanmina-SCI, said in a statement. “In addition, the acquisition
allows us to further diversify our product and customer end-markets.”

The deal is contingent on approval by U.S. and European regulators, as well
as worker councils at the European facilities. It is expected to close in
the fourth quarter.

Sanmina-SCI, created out of the $6 billion merger of Sanmina and SCI Systems
in July 2001, is a contract manufacturer, making equipment for the computer
and telecom industries on an outsourced basis. Outsourced manufacturing is a
growing market that IDC has forecast will be worth $231 billion by 2005.

IC Networks, meanwhile, has hit a rough patch. This morning, parent Siemens
announced the unit lost EUR158 million in the quarter and would cut 6,500
jobs. The job cuts come on top of 10,000 layoffs announced earlier,
amounting to a 30 percent staff reduction in a year’s time.

Sanmina-SCI, which has 100 plants worldwide, has added over a half dozen
this year, scooping up plants from PC makers and telecoms looking to cut
their manufacturing costs. In January, IBM signed a
three-year, $5-billion deal with Sanmina-SCI to take over plants in Research
Triangle Park and Scotland to manufacture much of Big Blue’s desktop
manufacturing services for the NetVista line in U.S. and European markets.
Two weeks
later, Sanmina-SCI scooped up Alcatel facilities in
Cherbourg, France; Gunzenhausen, Germany; and Toledo, Spain.

Also in January, Sanmina-SCI inked a deal with HP to buy a
plant in Isle d’Abeau, France, while providing outsourced manufacturing for
the computer and printer maker.