Fri, Oct 28, 2011 - Page 10 News List

Ericsson sells 50% stake in Sony Ericsson to Sony


LM Ericsson AB will sell its 50 percent stake in mobile phone maker Sony Ericsson to Sony Corp for 1.05 billion euros (US$1.46 billion) in cash, the Swedish wireless equipment firm said yesterday.

Ericsson said Sony Ericsson will become a wholly owned subsidiary of Sony and integrated into Sony’s broad platform of network-connected consumer electronics products.

The transaction is subject to customary closing conditions, including regulatory approvals, but has been approved by the appropriate decisionmaking bodies of both companies.

Ericsson said the transaction gives Sony an opportunity to rapidly integrate smartphones into its portfolio of network-connected consumer electronics devices such as tablets, TVs and personal computers.

Sony CEO Sir Howard Stringer said the acquisition will afford Sony operational efficiencies in engineering, network development and marketing.

“This acquisition makes sense for Sony and Ericsson and it will make the difference for consumers, who want to connect with content wherever they are, whenever they want,” Stringer said.

The deal will also provide Sony with an intellectual property cross-licensing agreement, covering all products and services of Sony as well as ownership of five essential patent families relating to wireless handset technology.

Helena Nordman-Knutson, an analyst with Ohman Fondkommission in Stockholm, Sweden, said the deal was expected and Ericsson received a good price.

“Sony Ericsson has no strategic value for Ericsson anymore,” Knutson said.

She added that the licensing agreement would be positive for both Ericsson and Sony.

Shares in Ericsson rose by 5.4 percent to 70.3 kronor when the Stockholm Stock Exchange opened, while Sony stock climbed 5.4 percent to ¥1.65 in Tokyo.

Ericsson said the shift in the mobile market, from simple mobile phones to smartphones that include access to Internet services and content, means the synergies for the company in having both a telecoms services portfolio and a handset operation have decreased.

The transaction is a logical strategic step that takes into account the nature of this evolution and its impact on the marketplace, the company said in a statement.

Ericsson said it would now focus on the global wireless market as a whole and how wireless connectivity can benefit people, business and society beyond just phones.

Ericsson and Sony also plan to set up a wireless connectivity initiative aimed at driving and developing the market’s adoption of connectivity across multiple platforms, they said.

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