Ericsson agrees to sell 50 per cent stake in Sony Ericsson to Sony for €1.05 billion

Ericsson and Sony Corporation today announced that Sony will acquire Ericsson’s 50 per cent stake in Sony Ericsson Mobile Communications (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 € 1.05 billion (US$1.45 billion).

“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 Howard Stringer, Sony’s chairman, CEO and president.

“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,” commented Hans Vestberg, president and CEO of Ericsson. “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 realise a truly connected world,” he added.

By the end of the third quarter of 2011, Sony Ericsson held a market share of 11 per cent (by value) in the Android phone market, representing 80 per cent of the company’s third quarter sales. During its ten years in operation Sony Ericsson has generated approximately €1.5 billion of profit and paid dividends totalling approximately €1.9 billion to its parent companies.

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.