Ericsson exits mobile handset 50:50 JV Sony Ericsson

New Delhi: Telecom equipment maker Ericsson today announced the completion of disinvestment of its entire stake in 50:50 mobile handset joint venture Sony Ericsson to the Japanese Sony Corporation.

Sony Ericsson, now, has become a wholly-owned subsidiary of Sony Corp.

“The agreed cash consideration for the transaction is 1.05 billion ($1.36 billion),” Ericsson said in a statement released today.

“Ericsson has today completed the divestment of its 50 percent stake in Sony Ericsson Mobile Communications AB (‘Sony Ericsson’), including the broad IP cross-licensing agreement, jointly announced by Sony Corporation (‘Sony’) and Ericsson on 27 October, 2011,” Ericsson said.

It further said Ericsson will report gain of approximately $1.11 billion (SEK 7.5 billion) in the first quarter result on 25 April, 2012, as ‘other operating income’ in the income statement.

Sony Ericsson started its operations on 1 October, 2001, with the combination of unprofitable handset operations of Ericsson and Sony.

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. Ericsson said in its 27 October statement.

During its ten years in operation Sony Ericsson has generated approximately 1.5 billion of profit and paid dividends totalling approximately 1.9 billion ($2.47 billion) to its parent companies, it added.

PTI