Ericsson divests from phone production, sells JV stake to Sony

THE day after Nokia relaunched itself as a smartphone manufacturer, Ericsson announced it was pulling out of the business entirely.Sony is buying Ericsson's 50 per cent stake in their Sony Ericsson handset joint-venture, making the mobile handset business a wholly-owned subsidiary of Sony.According to their joint statement, the transaction gives Sony an opportunity to rapidly integrate smartphones into its broad array of network-connected consumer electronics devices.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 1.05 billion euros ($1.46 billion).Following the sale, Ericsson and Sony will continue to work together on developing connectivity across multiple platforms.'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,' Sony's Chairman, Chief Executive Officer and President, Sir Howard Stringer, said.'We can more rapidly and more widely offer consumers smartphones, laptops, tablets and televisions that seamlessly connect with one another and open up new worlds of online entertainment. This includes Sony's own acclaimed network services, like the PlayStation Network and Sony Entertainment Network,' he added.Stringer also noted that the acquisition will afford Sony operational efficiencies in engineering, network development and marketing, among other areas.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.
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