STOCKHOLM, SWEDEN--(Marketwire - Mar 18, 2013) - Ericsson (
The main steps agreed upon to split up the JV are the following:
* Ericsson will take on the design, development and sales of the LTEmultimode thin modem products, including 2G, 3G and 4G multimode
* ST will take on the existing ST-Ericsson products, other than LTEmultimode thin modems, and related business as well as certain assembly and test facilities
* Starting the close down of the remaining parts of ST-Ericsson
The formal transfer of the relevant parts of ST-Ericsson to the parentcompaniesis expected to be completed during the third quarter of 2013, subject toregulatory approvals.
After the split up it is proposed that Ericsson will assume approximately1,800employees and contractors, with the largest concentrations in Sweden,Germany,India and China.
It is also proposed that ST will assume approximately 950 employees,primarilyin France and in Italy, to support ongoing business and new productsdevelopmentwithin ST.
Today, it is also announced that Carlo Ferro is appointed President andChiefExecutive Officer of ST-Ericsson, effective April 1, 2013. Ferro iscurrentlyChief Operating Officer of ST-Ericsson and succeeds Didier Lamouche who, aspreviously announced, will pursue opportunities outside the company. Ferrowilllead the work in securing both business continuity of ST-Ericsson andeffectivecompletion of the transition phase.
Hans Vestberg, President and CEO, Ericsson and Chairman of the Board ofDirectors, ST-Ericsson said: "I welcome Carlo Ferro as the new Presidentand CEOof ST-Ericsson. Carlo has over twenty years of experience in thesemiconductorindustry and a strong track record in driving and managing complextransformation projects. He has been a contributor to the solid progressST-Ericsson has made the past year in terms of strategy execution andsignificantlylowering the breakeven point."
"Ericsson continues to believe that the thin modems hold a strategic valuetothe wireless industry. With this move Ericsson will create a highly focused"thin modem only" operation - an area in which both parents have investedsignificant amounts to establish industry leading technology andIntellectualProperty," said Hans Vestberg. "Initial customer contacts give support tothebelief that our modems will meet the requirements of the manufacturers intherapidly growing smartphone and tablet market."
As previously communicated, Ericsson has made provisions of SEK -3.3 b. in2012which will cover costs related to the implementation of the strategicoption.Once the multimode thin modem business has been fully integrated intoEricssonin Q4 the operation will be reported as a standalone segment. Our currentbestestimate is that it will generate operating losses of approximately SEK 0.5b.in Q4, 2013, primarily related to R&D expenses.
The thin modem technology developed within ST-Ericsson has evolved into auniquearchitecture for low power, highly integrated multimode multi-band modemscovering GSM/GPRS/EDGE, TD-SCDMA, HSPA+, LTE (TDD/FDD), LTE-Advanced, thewidestarray of frequency bands and a feature set that includes Single RF ChipCarrierAggregation, VoLTE and IMS.
An LTE/HSPA+/3G/2G modem based on this evolved architecture was recentlydemonstrated at Mobile World Congress in Barcelona and has received itsfirstglobal operator certification.
CONFERENCE CALL FOR ANALYSTS, INVESTORS AND MEDIA
The conference call for financial analysts, investors and media will beginat14:00 CET (13:00 UK time, 09:00 Eastern Daylight Time in the US, and 22:00localtime in Japan). CFO Jan Frykhammar and Chief Strategist Douglas Gilstrap,willcomment on the announcement and take questions.
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NOTES TO EDITORS
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Ericsson is a world-leading provider of communications technology andservices.We are enabling the Networked Society with efficient real-time solutionsthatallow us all to study, work and live our lives more freely, in sustainablesocieties around the world.
Our offering comprises services, software and infrastructure withinInformationand Communications Technology for telecom operators and other industries.Today40 percent of the world's mobile traffic goes through Ericsson networks andwesupport customers' networks servicing more than 2.5 billion subscriptions.
We are more than 110,000 people working with customers in more than 180countries. Founded in 1876, Ericsson is headquartered in Stockholm, Sweden.In2012 the company's net sales were SEK 227.8 billion (USD 33.8 billion).Ericssonis listed on NASDAQ OMX, Stockholm and NASDAQ, New York stock exchanges.
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