Ericsson sells its 50% stake in Sony Ericsson for EUR 1.05 billion

Telecom equipment giant Ericsson and consumer electronics
major Sony announced that Sony will acquire Ericsson’s 50 percent stake in Sony
Ericsson Mobile Communications for EUR 1.05 billion in cash.

Following the acquisition, Sony Ericsson will become a
wholly-owned subsidiary of Sony. It will give Sony an opportunity to integrate
smartphones into its network-connected consumer electronics devices including
tablets, televisions and personal computers.

Both the consumers and the smart phone business will
benefit. Recently, Sony Ericsson said it will be focusing on smartphones in

The transaction 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.

Sony is looking at offering 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.

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,
chairman, chief executive officer and president of Sony.

The acquisition will afford Sony operational efficiencies in
engineering, network development and marketing, among other areas. Sony can
help people enjoy all our content – from movies to music and games – through
our many devices, in a way no one else can.

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.

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 totaling
approximately EUR 1.9 billion to its parent companies. Sony Ericsson posted
sales of EUR 6,294 million in FY 2010 and net income of EUR 90 million.

By Team
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