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Siemens Bids C$382 Million for Ruggedcom, Trumping Belden

Jan. 30 (Bloomberg) -- Siemens AG, Europe’s largest engineering company, offered C$382 million ($380 million) to buy Ruggedcom Inc., entering a bidding contest for the Canadian network company with Belden Inc.

Siemens agreed to pay C$33 for each share of the Woodbridge, Ontario-based maker of communications equipment used in industrial processes, the Munich-based company said in a statement today. That’s more than twice as much as Ruggedcom’s closing share price on Dec. 16, the last day of trading before St. Louis, Missouri-based Belden offered C$22 on Dec. 19.

The German manufacturer aims to duplicate the success of its $3.5 billion acquisition of UGS Corp. in 2007, which helped it gain an edge in industrial software. Chief Executive Officer Peter Loescher is relying on Helmuth Ludwig, head of Siemens’s North American industrial operations, to make the transaction work after the company booked goodwill impairments on purchases Loescher has made since becoming CEO that year.

“UGS was a success, it went well, now we are trying to do it again,” Ludwig, who was involved in the Plano, Texas-based software maker’s takeover, said in a telephone interview. Ludwig said he’s confident Ruggedcom will meet goals for return on capital employed. Even so, achieving the company’s rules for a takeover target’s enterprise value will require “hard work” and may take as many as three years.

Ruggedcom Jumps

Ruggedcom rose as much as 26 percent to C$33, the biggest intraday jump since Dec. 19, and was trading at C$32.86 at 11:16 a.m. in Toronto. Siemens fell as much as 1.1 percent to 72.02 euros and was down 0.9 percent in Frankfurt. The German company’ stock is at the lowest price in about six weeks.

Siemens usually requires an acquisition to add enterprise value two years after completion, and to meet return-on-capital-employed goals three years after integration.

The manufacturer has a goal of becoming a company with 100 billion euros ($131 billion) in sales through acquisitions. Sales in the fiscal year ended Sept. 30 totaled 73.5 billion euros.

ABB Ltd., a Zurich-based competitor which today agreed to buy Thomas & Betts Corp. for $3.9 billion, has exceeded $10 billion in acquisition spending since 2010.

Siemens’s offer Ruggedcom’s board of directors as well as Chief Executive Officer Marzio Pozzuoli and Finance Chief Roy Dalton, who together hold 13.6 percent of the shares, the Canadian manufacturer said.

Belden’s approach was unsolicited. Ruggedcom said on Dec. 19 it was evaluating Belden’s proposal and that it’s considering alternatives.

“We have a deal book, and Ruggedcom was on it, allowing us to act fast after the necessity came up,” Ludwig said.

Ruggedcom has 360 employees and reported revenue of about $94 million in the fiscal year ended March 31, 2011.

To contact the reporter on this story: Richard Weiss in Frankfurt at

To contact the editor responsible for this story: Benedikt Kammel at

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