German conglomerate Siemens AG is looking to end its participation in Fujitsu Siemens Computer, according to The Wall Street Journal, citing "people familiar with the matter."
The joint venture did $10.3 billion in sales last year, but Siemens CEO Peter Loscher apparently isn't pleased overall with the performance of FSC, which never found a real foothold in the U.S. in the face of competition with Hewlett-Packard and Dell.
"We have said that we want to focus on the three sectors--industry, energy, health care--and that we want to concentrate on them," a spokesman for Siemens told Forbes Wednesday.
Following a bribery scandal last year, Siemens is looking to increase its profitability and has recently shed several assets, and announced plans to lay off 4 percent of its workforce.
But Japan-based Fujitsu may not be all that disappointed. In a Tuesday news conference, Fujitsu President Kuniaki Nozoe said that mobile phones are going to be a more profitable business than PCs. That could mean it may not be interested in acquiring Siemens' 50 percent stake in the venture, for which it has right of first refusal.
FSC, which was founded in 1999, wasn't able to take advantage collectively of the companies' individual strengths in Europe and Asia, respectively, and subsequently "foundered on the shoals of a capricious and rapidly evolving IT market," said analyst Charles King of Pund-IT in a research note Wednesday.
The Journal quotes a banker who said the nine-year-old joint venture could be valued at between $3.12 billion and $4.65 billion.