Ericsson, STMicroelectronics agree to split up joint venture ST-Ericsson

theflyonthewall.com

Ericsson (ERIC) and STMicroelectronics (STM) announced an agreement on the way forward for the joint venture ST-Ericsson. As communicated by the parent companies in December 2012, both have been working together toward a strategic solution for the JV. After months of intensive joint work, the parent companies have selected the strategic option which maximizes their respective future prospects and growth plans. Ericsson will take on the design, development and sales of the LTE multimode thin modem products, including 2G, 3G and 4G multimode. ST will take on the existing ST-Ericsson products, other than LTE multimode thin modems, and related business as well as certain assembly and test facilities. The formal transfer of the relevant parts of ST-Ericsson to the parent companies is expected to be completed during the Q3, subject to regulatory approvals. After the split up it is proposed that Ericsson will assume approximately 1,800 employees and contractors, with the largest concentrations in Sweden, Germany, India and China. It is also proposed that ST will assume approximately 950 employees, primarily in France and in Italy, to support ongoing business and new products development within ST.

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