Sony to buy Ericsson's stake in Sony Ericsson
Ericsson and Sony Corporation have announced that Sony is to acquire Ericsson's 50 percent stake in Sony Ericsson Mobile Communications AB, making the mobile handset business a wholly-owned subsidiary of Sony.
The transaction is said to give 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 is also believed to provide 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 is to receive a cash consideration of EUR 1.05 billion.
Sir Howard Stringer, Chairman, CEO & President, Sony said, "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. 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 & CEO, Ericsson.
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.
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