AEG AG

formerly (1967-85) Aeg-telefunken Ag, major German electronics and electrical-equipment company, controlled (since 1985) by Daimler-Benz AG. It produces home and industrial electrical equipment, telecommunications equipment, industrial and electronics components, office machines, computers, and home appliances. Headquarters are in Frankfurt am Main. The company was founded in Berlin in 1883 when the industrialist Emil Rathenau, with financial support from Siemens and Halske, another major German electrical company, founded the Deutsche Edison Gesellschaft fr Angewandte Electricitt ("German Edison Company for Applied Electricity"). In 1887 the company was renamed the Allgemeine Elektricitts Gesellschaft (AEG), which became largely responsible for installing Germany's first electrical system. It strung transmission lines and built electric trolley systems across Germany before 1900. In 1941 AEG acquired Gesellschaft fr Elektrische Unternehmungen AG, an electric holding company, thus tightening its grip on the German electrical market. In 1966 Telefunken AG, formerly an AEG subsidiary, was integrated into AEG, changing the company name in 1967 to AEG-Telefunken. In the latter part of the 20th century, AEG-Telefunken faced severe financial problems, which some analysts attributed to the company's decision to continue making high-priced consumer electronics goods (e.g., stereos and television sets) long after Telefunken's prices had been undercut by foreign competitors. The German government at first refused to bail the company out of its financial crisis, and in a 1979 plan gave AEG-Telefunken's creditor banks control of the company. Even though AEG's creditor banks wrote off the company's losses in 1981 and 1982, massive outstanding debts threatened AEG's survival. During 1983 most of the company's Telefunken operations were sold off, in 1984 the company was reorganized, and early in 1985 it was renamed simply AEG AG. In 1985 Daimler-Benz AG became the major shareholder in AEG.