Sony on Wednesday completed the acquisition of Ericsson’s 50 pc stake in Sony Ericsson. Ericsson and Sony Corporation had announced on October 27, 2011 that Sony would acquire Ericsson's 50 percent stake in Sony Ericsson Mobile Communications AB ("Sony Ericsson"), making the mobile handset business a wholly-owned subsidiary of Sony.
“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 October 27, 2011. This makes Sony Ericsson a wholly-owned subsidiary of Sony. The agreed cash consideration for the transaction is EUR 1.05 billion”, Ericsson said in statement.
Ericsson’s gain on the transaction will be approximately SEK 7.5 billion and will be reported in the first quarter result on April 25, 2012, as ‘Other operating income’ in the income statement. With this Sony Ericsson has become a wholly-owned subsidiary of Sony and integrated into Sony's broad platform of network-connected consumer electronics products.
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.
In October 2011 Howard Stringer, Sony's Chairman, Chief Executive Officer and President had said that the 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.
Mr Stringer had also noted that 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 and CEO of Ericsson.