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Ericsson: Sony to acquire Ericsson's share of Sony Ericsson

October 27, 2011 - Stockholm, Sweden

-- Sony Ericsson to become a wholly-owned subsidiary of Sony and
integrated into Sony's broad platform of network-connected consumer
electronics products
-- The transaction also provides Sony with a broad IP cross-licensing
agreement and ownership of five essential patent families
-- Ericsson to receive EUR 1.05 billion cash payment
-- Sony and Ericsson to create wireless connectivity initiative to drive
connectivity across multiple platforms

Ericsson (NASDAQ: ERIC) and Sony Corporation ("Sony") today announced thatSonywill acquire Ericsson's 50 percent stake in Sony Ericsson MobileCommunicationsAB ("Sony Ericsson"), making the mobile handset business a wholly-ownedsubsidiary of Sony.

The transaction gives Sony an opportunity to rapidly integrate smartphonesintoits broad array of network-connected consumer electronics devices -includingtablets, televisions and personal computers - for the benefit of consumersandthe growth of its business. The transaction also provides Sony with a broadintellectual property (IP) cross-licensing agreement covering all productsandservices of Sony as well as ownership of five essential patent familiesrelatingto wireless handset technology.

As part of the transaction, Ericsson will receive a cash consideration ofEUR1.05 billion.

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

This means that the synergies for Ericsson in having both a world leadingtechnology and telecoms services portfolio and a handset operation aredecreasing. Today Ericsson's focus is on the global wireless market as awhole;how wireless connectivity can benefit people, business and society beyondjustphones. Consistent with that mission, by setting up a wireless connectivityinitiative, Ericsson and Sony will work to drive and develop the market'sadoption of connectivity across multiple platforms.

"This acquisition makes sense for Sony and Ericsson, and it will make thedifference for consumers, who want to connect with content wherever theyare,whenever they want. With a vibrant smartphone business and by gainingaccess toimportant strategic IP, notably a broad cross-license agreement, our four-screenstrategy is in place. We can more rapidly and more widely offer consumerssmartphones, laptops, tablets and televisions that seamlessly connect withoneanother and open up new worlds of online entertainment. This includesSony's ownacclaimed network services, like the PlayStation Network and SonyEntertainmentNetwork," said Sir Howard Stringer, Sony's Chairman, Chief ExecutiveOfficer andPresident. Mr Stringer also noted that the acquisition will afford Sonyoperational efficiencies in engineering, network development and marketing,among other areas. "We can help people enjoy all our content - from moviestomusic 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'sconsumer products knowledge with Ericsson's telecommunication technologyexpertise, it was a perfect match to drive the development of featurephones.Today we take an equally logical step as Sony acquires our stake in SonyEricsson and makes it a part of its broad range of consumer devices. Wewill nowenhance our focus on enabling connectivity for all devices, using our R&Dandindustry leading patent portfolio to realize a truly connected world" saidHansVestberg, President and CEO of Ericsson.

When Sony Ericsson started its operations on October 1, 2001, it combinedtheunprofitable handset operations from Ericsson and Sony. Following asuccessfulturnaround the company has become a market leader in the development offeaturephones by integrating Sony's strong consumer products knowledge andEricsson'stelecommunications 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 onestablished itself in the smartphone segment. More recently, the companyhassuccessfully made the transition from feature phones to Android-basedXperia™smartphones. By the end of the third quarter of 2011, Sony Ericsson held amarket share of 11 percent (by value) in the Android phone market,representing80 percent of the company's third quarter sales. During its ten years inoperation Sony Ericsson has generated approximately EUR 1.5 billion ofprofitand paid dividends totalling approximately EUR 1.9 billion to its parentcompanies. Prominent models include "Xperia™ arc" and "Xperia™ mini"whichreceived 2011 EISA Awards, while recent notable additions to the lineupinclude"Xperia™ PLAY" and "Xperia™ arc S".

The transaction, which has been approved by appropriate decision-makingbodiesof both companies, is expected to close in January 2012, subject tocustomaryclosing conditions, including regulatory approvals.

Ericsson has accounted for its 50 percent share in Sony Ericsson accordingtothe equity method. Following completion of the transaction, Ericsson willhaveno outstanding guarantees relating to Sony Ericsson and will no longeraccountfor Sony Ericsson as an investment on balance sheet. The transaction willresultin a positive capital gain for Ericsson which will be defined after closingofthe transaction.

SEB Enskilda is acting as Ericsson's sole financial advisor in thetransaction.

Facts about Sony EricssonSales (FY 2010) EUR 6,294 millionNet income (FY 2010) EUR 90 millionNumber of employees 7,500(December 2010)Headquarters LondonR&D sites Beijing, Lund, Silicon Valley and TokyoMarket share 11% in Android (FY2011/3Q) 80 % of sales are smartphones (Android)

Notes to editors:

Ericsson is the world's leading provider of technology and services totelecomoperators. Ericsson is the leader in 2G, 3G and 4G mobile technologies, andprovides support for networks with over 2 billion subscribers and has theleading position in managed services. The company's portfolio comprisesmobileand fixed network infrastructure, telecom services, software, broadband andmultimedia solutions for operators, enterprises and the media industry. TheSonyEricsson and ST-Ericsson joint ventures provide consumers with feature-richpersonal mobile devices.

Ericsson is advancing its vision of being the "prime driver in an all-communicating world" through innovation, technology, and sustainablebusinesssolutions. Working in 180 countries, more than 90,000 employees generatedrevenue of SEK 203.3 billion (USD 28.2 billion) in 2010. Founded in 1876withthe 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 theconsumerand professional markets. With its music, pictures, computer entertainmentandonline businesses, Sony is uniquely positioned to be the leadingelectronics andentertainment company in the world. Sony recorded consolidated annual salesofapproximately $87 billion for the fiscal year ended March 31, 2011.

Sony Global Web Site:

Ericsson discloses the information provided herein pursuant to theSecuritiesMarkets Act and/or the Financial Instruments Trading Act. The informationwassubmitted for publication on October 27, 2011, at CET 08.15am.

Press release in PDF:

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(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



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