STOCKHOLM, SWEDEN--(Marketwire - Dec 20, 2012) -
* Decision to not acquire full majority of ST-Ericsson.
* Non-cash charge of approximately SEK 8 b. in Q4, 2012 related to its 50% stake in ST-Ericsson, including approximately SEK 3 b. cash out of which the majority in 2013.
The charge includes write down of assets to reflect the current best estimate of Ericsson's share of the fair market value of the JV, as well as additional charges related to the available strategic options for the future of the ST- Ericsson assets.
ST-Ericsson announced its strategic plan in April 2012 and is in the middle of executing on company transformation aiming at lowering its break-even point and introducing new technologies. On October 9, 2012, the two parent companies announced a strategic review of the business plan and the future ownership structure. On December 10, 2012, STMicroelectronics (
Ericsson continues to believe that the modem technology, which it originally contributed to the JV, has a strategic value for the wireless industry. For Ericsson, a key priority in this process is a successful market introduction of the new LTE modems which Ericsson is certain will be very competitive and needed in the market.
Ericsson will continue to explore various strategic options for the future of ST-Ericsson assets. To acquire the full majority of ST-Ericsson is, however, not an option. Ericsson's current best estimate is that the implementation of the strategic options at hand will require approximately SEK 3 b. of Ericsson funding, of which the majority in 2013.
Ericsson will provide any additional financial information in conjunction with the Q4 report 2012.
During the process of exploring options Ericsson will not speculate on the possible outcomes, timelines, and future strategic alternatives for ST- Ericsson assets.
Conference call for analysts, investors and media
Ericsson invites media, investors and analysts to a conference call with President and CEO Hans Vestberg and Jan Frykhammar, CFO, at 14.00 (CET) on December 20, 2012.
A replay of the conference call will be available after the scheduled end time. The playback will be available from approx. 16.30 CET on December 20, 2012, until 23.59 CET on December 27, 2012.
Dial in number: Sweden number: +46 850 520 270 International number: +44 208 817 9301 US number: +1 718 354 12 26 Confirmation code: 9624 162# password: Tulip Replay Sweden replay number: +46 8 505 202 94 International replay number: +44 20 776 964 25 Replay pass code: 9624 162#
Ericsson discloses the information provided herein pursuant to the Securities Markets Act and/or the Financial Instruments Trading Act. The information was submitted for publication on December 20, 2012 at 08.30 CET.
Ericsson's Q4 results negatively impacted by non-cash charge: http://hugin.info/1061/R/1666557/540889.pdf
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Source: Ericsson via Thomson Reuters ONE