Ericsson and STMicroelectronics complete transaction to split up ST-Ericsson
(firmenpresse) - STOCKHOLM, SWEDEN -- (Marketwired) -- 08/05/13 --
* 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
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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.
Ericsson and ST complete transaction to split up ST-Er:
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