STOCKHOLM, SWEDEN — (Marketwire) — 10/27/11 —
Ericsson (NASDAQ: ERIC) and Sony Corporation (“Sony”) today announced that
Sony
will acquire Ericsson-s 50 percent stake in Sony Ericsson Mobile
Communications
AB (“Sony Ericsson”), making the mobile handset business a wholly-owned
subsidiary of Sony.
The transaction gives Sony an opportunity to rapidly integrate smartphones
into
its broad array of network-connected consumer electronics devices –
including
tablets, televisions and personal computers – 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 rich 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 means that the synergies for Ericsson in having both a world leading
technology and telecoms services portfolio and a handset operation are
decreasing. Today Ericsson-s focus is on the global wireless market as a
whole;
how wireless connectivity can benefit people, business and society beyond
just
phones. Consistent with that mission, by setting up a wireless connectivity
initiative, Ericsson and Sony will work to drive and develop the market-s
adoption of 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. 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,” said Sir Howard Stringer, Sony-s Chairman, Chief Executive
Officer and
President. Mr Stringer also noted that the acquisition will afford Sony
operational efficiencies in engineering, network development and marketing,
among other areas. “We can help people enjoy all our content – from movies
to
music and games – through our many devices, in a way no one else can.”
“Ten years ago when we formed the joint venture, thereby combining Sony-s
consumer products knowledge with Ericsson-s telecommunication technology
expertise, it was a perfect match to drive the development of feature
phones.
Today we take an equally logical step as Sony acquires our stake in Sony
Ericsson and makes it a part of its broad range of consumer devices. We
will now
enhance our focus on enabling connectivity for all devices, using our R&D
and
industry leading patent portfolio to realize a truly connected world” said
Hans
Vestberg, President and CEO of Ericsson.
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 by integrating Sony-s strong consumer products knowledge and
Ericsson-s
telecommunications technology leadership. The Walkman phone and Cyber-
shot phone are well known examples.
With the successful introduction of the P1 in 2007, Sony Ericsson early on
established itself in the smartphone segment. More recently, the company
has
successfully made the transition from feature phones to Android-based
Xperia
smartphones. By the end of the third quarter of 2011, Sony Ericsson held a
market share of 11 percent (by value) in the Android phone market,
representing
80 percent of the company-s third quarter sales. During its ten years in
operation Sony Ericsson has generated approximately EUR 1.5 billion of
profit
and paid dividends totalling approximately EUR 1.9 billion to its parent
companies. Prominent models include “Xperia arc” and “Xperia mini”
which
received 2011 EISA Awards, while recent notable additions to the lineup
include
“Xperia PLAY” and “Xperia arc S”.
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.
SEB Enskilda is acting as Ericsson-s sole financial advisor in the
transaction.
Notes to editors:
Ericsson is the world-s leading provider of technology and services to
telecom
operators. Ericsson is the leader in 2G, 3G and 4G mobile technologies, and
provides support for networks with over 2 billion subscribers and has the
leading position in managed services. The company-s portfolio comprises
mobile
and fixed network infrastructure, telecom services, software, broadband and
multimedia solutions for operators, enterprises and the media industry. The
Sony
Ericsson and ST-Ericsson joint ventures provide consumers with feature-rich
personal mobile devices.
Ericsson is advancing its vision of being the “prime driver in an all-
communicating world” through innovation, technology, and sustainable
business
solutions. Working in 180 countries, more than 90,000 employees generated
revenue of SEK 203.3 billion (USD 28.2 billion) in 2010. Founded in 1876
with
the headquarters in Stockholm, Sweden, Ericsson is listed on NASDAQ OMX,
Stockholm and NASDAQ New York.
About Sony
Sony Corporation is a leading manufacturer of audio, video, game,
communications, key device and information technology products for the
consumer
and professional markets. With its music, pictures, computer entertainment
and
online businesses, Sony is uniquely positioned to be the leading
electronics and
entertainment company in the world. Sony recorded consolidated annual sales
of
approximately $87 billion for the fiscal year ended March 31, 2011.
Sony Global Web Site:
Ericsson discloses the information provided herein pursuant to the
Securities
Markets Act and/or the Financial Instruments Trading Act. The information
was
submitted for publication on October 27, 2011, at CET 08.15am.
Press release in PDF:
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Ericsson via Thomson Reuters ONE
[HUG#1558488]
FOR FURTHER INFORMATION, PLEASE CONTACT
Ericsson Corporate Public & Media Relations
Phone: +46 10 719 69 92
E-mail:
Ericsson Investor Relations
Phone: +46 10 719 00 00
E-mail:
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