It’s official: Sony Ericsson has announced that JV partner Sony will acquire Ericsson’s 50% stake in Sony Ericsson Mobile Communications AB (“Sony Ericsson”), in a cash deal of EUR 1.05 billion, making the mobile handset business a wholly-owned subsidiary of Sony. The transaction, which has been approved by appropriate decision-making bodies of both companies, is expected to close in January 2012, subject to customary closing conditions, including regulatory approvals. After completion of the transaction, Ericsson will have no outstanding guarantees relating to Sony Ericsson and will no longer account for Sony Ericsson as an investment on balance sheet.
– Expanding Sony’s product portfolio: Following the transaction, Sony will integrate the mobile phone business with its consumer electronics business for its growth, according to a statement made by the company. Sony aims at a more seamless integration of smart phones with its portfolio of connected digital devices including Televisions, PCs and Gaming Consoles. Although, Sony Ericsson had branded camera and music phones on the lines of Sony products, for example Cybershot and Walkman, with Sony getting full control, the integration will be expanded to its complete smartphone range. However, the specifics about rebranding have not been discussed. Sony had also indicated in its quarterly results that it will shift its entire handset portfolio to Smartphones in 2012 .
– Patents: The transaction also provides Sony with a broad intellectual property (IP) cross-licensing agreement covering all products and services of Sony as well as ownership of five essential patent families relating to wireless handset technology.
– New connectivity initiative: The statement also mentions that the two are going to set up a wireless connectivity initiative, and will work to drive and develop the market’s adoption of connectivity across multiple platforms.