BEIJING, June 7-- German engineering giant Siemens and BenQ, an electronic company in China's Taiwan Province, have reached an agreement on a partnership in mobile phones.

The German engineering and technology giant's supervisory board is due to approve the deal Monday and make an announcement this week, Germany's Financial Times cited people familiar with the talks as saying.

The Munich-based company declined to comment on the Financial Times report, but said board members would be talking about the unit's future ahead of the next scheduled meeting in July. Shares of Siemens were up 1.8 percent to 61.35 euros(75.39 US dollars) in afternoon trading in Frankfurt.

BenQ, which was split off from electronics company Acer Inc. in 2001, is the biggest maker of mobile phones in Taiwan, China. It also makes phones for Motorola and NEC Corp. Analysts say that the deal would help BenQ boost sales in the European market.

Siemens has been searching for months for a buyer or joint venture partner for its troubled mobile handsets division, which lost more than 500 million euros during the year ending in March. Its global share has dropped to 5.5 percent, its worst performance in six years.

Companies, including Motorola Inc. and South Korea's LG Electronics Inc. and Samsung Corp., have sought to buy the unit, but Siemens CEO Klaus Kleinfeld said in April the division is more likely to be spun off with Siemens retaining a stake.

(Agencies)