Developing Telecoms | Sony acquires Ericsson’s stake in handset joint venture

24 May 2012

Industry News

LATEST NEWS:

WACS launch will boost capacity – and connectivity – in South Africa Lat Am businesses booming as Europe lags behind for international operators 100G technology makes its debut in Central America Free conference calling now available in Israel Internet-free mobile Facebook, email and online chat apps platform launches... Indian telco giant taking steps into Brazil Green power solutions provider spreads into South Asia Cable agreement to bolster international connectivity in Iraq Lat Am giant looks to Netherlands to boost European footprint CSP unifying mediation systems across four Central American countries Thai operator secures wireless distribution agreement Financial services project reaching out to millions of Africans Fibre investment on the way in Algeria Android tablets gaining popularity in Southeast Asia Bharti seeking JV takeover as profits slide How an Alternative Approach to SIM Card Provisioning Helps Operators Cure t... Solar-powered learning initiative takes off in Uganda GSMA voices criticism of Indian licensing proposals Enhanced mobile broadband deploying across three Baltic countries Market developments lay the foundation for future growth in Iraq India Feels More Shockwaves from the So-called ‘2G Scandal' Overpriced broadband faces fibre challenge in Angola First commercial 4G services go live in Croatia VimpelCom sells Vietnamese assets TRAI advocates new operators entering 2G auctions Romania’s first MVNE launching imminently Indian tax change could provoke legal action from Vodafone Mobile growth slows in Iran as penetration reaches saturation point Thailand close to finalising 3G auction process Internet Exchange Points Spur Internet Growth in Emerging Markets Incoming fibre boosts investment prospects for Burundi 3G on the way in Djibouti, but competition is required Fibre, not privatisation, could be the answer for Africa’s fixed-line opera...

Sony acquires Ericsson’s stake in handset joint venture

Friday, 28 October 2011 11:27 | James Barton

Attention: open in a new window.

Ericsson and Sony have announced that Sony will acquire Ericsson’s 50 percent stake in Sony Ericsson, making the mobile handset business a wholly-owned subsidiary of Sony.

The transaction gives Sony an opportunity to integrate smartphones into its array of network-connected consumer electronics devices for the benefit of consumers and the growth of its business. The transaction also provides Sony with a broad intellectual property (IP) cross-licensing agreement covering all products and services of Sony as well as ownership of five essential patent families relating to wireless handset technology.

As part of the transaction, Ericsson will receive a cash consideration of EUR 1.05 billion.

During the past ten years the mobile market has shifted focus from simple mobile phones to smartphones that include access to internet services and content. The transaction is a logical strategic step that takes into account the nature of this evolution and its impact on the marketplace.

“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. With a vibrant smartphone business and by gaining access to important strategic IP, notably a broad cross-license agreement, our four-screen strategy is in place”, said Sir Howard Stringer, Sony’s Chairman, CEO and President.

When Sony Ericsson started its operations on October 1, 2001, it combined the unprofitable handset operations from Ericsson and Sony. Following a successful turnaround the company has become a market leader in the development of feature phones.

The transaction, which has been approved by appropriate decision-making bodies of both companies, is expected to close in January 2012, subject to customary closing conditions, including regulatory approvals.

Ericsson has accounted for its 50 percent share in Sony Ericsson according to the equity method. Following completion of the transaction, Ericsson will have no outstanding guarantees relating to Sony Ericsson and will no longer account for Sony Ericsson as an investment on balance sheet. The transaction will result in a positive capital gain for Ericsson which will be defined after closing of the transaction.

Add this page to your favorite Social Bookmarking websites