Siemens rejects management buyout

Siemens has rejected an offer to buy out its chip factory in Tyneside.

The management buyout team, believed to be backed by China Telecom, put up £400m for the plant.

But a spokeswoman for Siemens said: "The management buyout (MBO) is off. But there are other deals, and negotiations are continuing." She refused to be drawn on the identity of the other interested parties or the reasons why the MBO was rejected.

The factory, which cost £650m to build, was partly funded by grants of £50m from the UK government. The spokeswoman insisted Siemens will pay back any money owed to the government if it fails to sell the factory. The closure was announced in July of last year.

Most of the workers have been laid off, but 250 remain in a caretaker role at the plant. The final closure is slated for June with all but 100 staff leaving in March.

Ironically, a Datamonitor report last month put Siemens semiconductor in the top ten chip makers in terms of sales revenue for the first time ever.