Ericsson and STMicroelectronics complete transaction to split up ST-Ericsson
(Thomson Reuters ONE) -
* Formal transfer of relevant parts of ST-Ericsson to the parent companies has
taken place on August 2, 2013
* Close down of the remaining activities of ST-Ericsson has started
Ericsson (NASDAQ:ERIC) and STMicroelectronics (NYSE:STM) today announced the
closing of the transaction for the split up of ST-Ericsson. This follows the
announcement the companies made on March 18, 2013 on the chosen strategic option
for the future of the joint venture.
Effective August 2, 2013 Ericsson has taken on the design, development and sales
of the LTE multimode thin modem solutions, including 2G, 3G and 4G
interoperability. In total, approximately 1,800 employees and contractors have
joined Ericsson.
ST has taken on the existing ST-Ericsson products, other than LTE multimode thin
modems, and the GNSS (Global Navigation Satellite System) connectivity solution
sold to a third party, and related business as well as certain assembly and test
facilities. In total, approximately 1,000 employees have joined
STMicroelectronics.
As previously communicated, Ericsson and ST have taken the expenses and the
margin of their respective activities since March 2, 2013.
The close down of the remaining parts of ST-Ericsson has started and both
parents are assuming equal funding of the wind-down activities.
Douglas Gilstrap, Senior Vice President and Chief Strategist at Ericsson said:
"We welcome the team of about 1,800 modem-experts that join Ericsson. Ericsson
continues to see great value in the LTE multimode thin modems as they are an
important part of our vision of 50 billion connected devices in a Networked
Society. The market potential is there and Ericsson will now focus on bringing
the best modems to market, and work closely with customers to integrate them
into their products."
Georges Penalver, Executive Vice President, Chief Strategy Officer at ST said:
"We have finalized the agreement fully on track to our plan, with minimized
social impact and lower exit costs than anticipated. We welcome our new
employees as we are adding strong competencies in the areas of embedded
processing, RF, analog and power technologies, as well as in software and
complex system integration, to fuel growth in many of our product areas where we
have significant business opportunities."
With this move Ericsson now has a highly focused thin-modem operation with
industry leading technology and Intellectual Property. The LTE multimode thin
modems are targeted for smartphones and tablets as well as other connected
devices.
Mats Norin Head of Modems at Ericsson said: "The products are future proof for
successor standards, and cover all major access standards including LTE FDD/TDD,
HSPA+, TD-SCDMA and GSM. The small size and low power consumption, leading to
longer battery life time makes these modems a very attractive product on the
market. We are now in a very exciting execution phase and we continue to engage
with customer development teams."
In the fourth quarter, 2012, Ericsson made a provision of SEK 3.3 b., which
provides for Ericsson's share of obligations for the wind-down of ST-Ericsson
and resulted in a net exposure of SEK 1.6 b. at the end of the second quarter,
2013.
Once the multimode thin modem business has been fully integrated into Ericsson
in the fourth quarter 2013 the operation will continue to be reported as a
segment. Our current best estimate, which is in line with our previously
communicated estimates, is that it will generate operating losses of
approximately SEK -0.5 b. in fourth quarter 2013, primarily related to R&D
expenses.
NOTES TO EDITORS
Download high-resolution photos and broadcast-quality video at
www.ericsson.com/press
Ericsson is a world-leading provider of communications technology and services.
We are enabling the Networked Society with efficient real-time solutions that
allow us all to study, work and live our lives more freely, in sustainable
societies around the world.
Our offering comprises services, software and infrastructure within Information
and Communications Technology for telecom operators and other industries. Today
40 percent of the world's mobile traffic goes through Ericsson networks and we
support customers' networks servicing more than 2.5 billion subscriptions.
We are more than 110,000 people working with customers in more than 180
countries. Founded in 1876, Ericsson is headquartered in Stockholm, Sweden. In
2012 the company's net sales were SEK 227.8 billion (USD 33.8 billion). Ericsson
is listed on NASDAQ OMX, Stockholm and NASDAQ, New York stock exchanges.
www.ericsson.com
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FOR FURTHER INFORMATION, PLEASE CONTACT
Ericsson Corporate Communications
Phone: +46 10 719 69 92
E-mail: media.relations(at)ericsson.com
Ericsson Investor Relations
Phone: +46 10 719 00 00
E-mail: investor.relations(at)ericsson.com
Ericsson and ST complete transaction to split up ST-Er:
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Source: Ericsson via Thomson Reuters ONE
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Datum: 05.08.2013 - 08:01 Uhr
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