Japanese electronics giant Sony said Thursday it would buy out its Swedish partner Ericsson from their mobile phone joint venture, giving it full control over its increasingly vital handset business. "Sony will acquire Ericsson's 50 percent stake in Sony Ericsson ... making the mobile handset business a wholly-owned subsidiary of Sony," the two companies said.
The deal calls for Sony to hand over 1.05 billion euros ($1.47 billion) in cash to the Swedish telecom equipment maker in exchange for half their joint venture, as well as all related patents and licences. The deal, which still needs regulatory approval, is expected to close by January 2012, the companies said.
The Japanese-Swedish group was created in 2001, combining the then unprofitable handset operations of Ericsson and Sony to today become the sixth-biggest player in the global market. While hailing the past decade's partnership with Ericsson, Sony president and chief executive Howard Stringer pointed out that the market had drastically shifted since 2001 from focusing on loss-making simple mobile phones to highly profitable smartphones.
The separation from the Swedish company was therefore a logical and strategic step that would enable Sony to more efficiently deliver devices that can connect to each other and open up new entertainment possibilities, he told a news conference in London. By taking full control, Sony can integrate its smartphone operation with its tablet, hand-held game console and personal computer businesses to save on costs and better synchronise development of mobile devices.
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