A report out of China says Siemens AG (NYSE: SI; Frankfurt: SIE)has signed a deal to purchase the telecom router products of Harbour Networks Holdings Ltd.

Siemens supposedly purchased the Power Hammer core router, PowerHammer ESR multiservice edge router, and Big Hammer metro switch for $110 million, according to the China Business News. The report says Harbour would still retain a telecom presence with its Hammer 10000 IP DSLAM and its OpCity multiservice optical transport platform, among other product lines.

Neither company could be reached at press time. Early today, the Xinhua news service reported that Siemens had declined to comment on the matter.

Siemens has said it wants to increase its presence in China. And Harbour has been the subject of takeover rumors -- either by Siemens or by Ericsson AB (Nasdaq: ERIC), which likewise has talked about making moves in China. (See Analysts Doubt Ericsson/UTStarcom Deal.) In fact, the Shanghai Daily News reported earlier this year that Harbour had offered itself to Siemens but had been turned down.

Siemens has made recent headway in China with an IPTV equipment win at China Telecom Corp. Ltd. (NYSE: CHA) subsidiary Shanghai Telecom, and trials with China Netcom Corp. Ltd. (NYSE: CN; Hong Kong: 0906) (See Siemens Breaks Into Chinese IPTV.)

One interesting aspect of the deal is that it would put Siemens into the router game. Siemens sells carrier Ethernet switches, but for routers, it's relied on a reseller deal with Juniper Networks Inc. (NYSE: JNPR), a relationship that might be strained should Siemens obtain its own routers.

— Craig Matsumoto, Senior Editor, Light Reading