After ten years, Sony and Ericsson have bid adieu to their handset joint venture, with Sony’s agreement to buy out the Swedish equipment manufacturer’s stake for $1.5 billion. Announced last Thursday, the deal will enable Ericsson to sharpen its focus on its network infrastructure business. Describing the pact as “the beginning of something which I think is quite magical,” Sony Chairman Sir Howard Stringer told reporters that his company’s goal in acquiring Ericsson’s stake is to enable his company to integrate Sony media content with wireless smart phones, laptops, tablet PCs and televisions “that seamlessly connect with one another and open up new worlds of online entertainment.” Ericsson, a major player in the global cellular handset market before the advent of smart phones, launched the handset venture with Sony in October 2001. Although the venture partners enjoyed some early success with the production of various music and camera phones, it has since lost ground to Apple, Inc., Samsung, HTC, and other smart phone manufacturers. Statistics compiled by market research firm Canalys show that Sony-Ericsson’s share of the global handset market amounted to a mere 4.2% during the second quarter of this year. As part of the deal, Sony will also receive access to Ericsson’s stable of wireless handset patents. Contingent upon receipt of regulatory approvals, the companies hope to complete the transaction in January.
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Sony to pay $1.5 billion for Ericsson joint venture stake
- Paul, Weiss, Rifkind, Wharton & Garrison LLP
- Patrick S. Campbell
- Sweden, USA
- November 4 2011
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