By Telecom Lead Team: Ericsson has completed the
divestment of its 50 percent stake in Sony Ericsson Mobile Communications,
including the broad IP cross-licensing agreement.
The buyout was announced by both companies on October 27,
last year. The buyout makes Sony Ericsson a wholly-owned subsidiary of Sony.
The agreed cash consideration for the transaction is EUR 1.05 billion.
The move is expected to give Sony a boost in integrating
its mobile phone & gaming console portfolios. It will allow Sony to compete
with the likes of Apple’s iPhone which gives users a seamless experience on a
single device.
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.
Sony Ericsson started its operations on 1 October, 2001,
with the combination of unprofitable handset operations of Ericsson and Sony.
By the end of the third quarter of 2011, Sony Ericsson
held a market share of 11 percent (by value) in the Android phone market,
representing 80 percent of the company’s third quarter sales.
During its ten years in operation Sony Ericsson generated
approximately €1.5 billion of profit and paid dividends totalling approximately
€1.9 billion ($2.47 billion) to its parent companies.
Recently,
Sony Ericsson reported $316.57 million net loss for the year 2011. It reported sales income of
5.21 billion euros in 2011 against 6.29 billion euros in 2010.
editor@telecomlead.com
