Ericsson and STMicroelectronics agree on strategic way forward for ST- Ericsson
STOCKHOLM, SWEDEN -- (Marketwire) -- 03/18/13 -- Ericsson (NASDAQ:
ERIC) and STMicroelectronics (NYSE: STM) today announced an agreement
on the way forward for the joint venture (JV) ST-Ericsson. As
communicated by the parent companies in December 2012, both have been
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.
The main steps agreed upon to split up the JV are the following:
* Ericsson will take on the design, development and sales of the
thin modem products, including 2G, 3G and 4G
* ST will take on the existing ST-Ericsson products, other than LTE
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
is expected to be completed during the third quarter
of 2013, subject to regulatory approvals.
After the split up it is proposed that Ericsson will assume
employees and contractors, with the largest
concentrations in Sweden, Germany,
India and China.
It is also proposed that ST will assume approximately 950 employees,
in France and in Italy, to support ongoing business and new
Today, it is also announced that Carlo Ferro is appointed President
Executive Officer of ST-Ericsson, effective April 1, 2013.
Ferro is currently
Chief Operating Officer of ST-Ericsson and
succeeds Didier Lamouche who, as previously announced, will pursue
opportunities outside the company. Ferro will
lead the work in
securing both business continuity of ST-Ericsson and
completion of the transition phase.
Hans Vestberg, President and CEO, Ericsson and Chairman of the Board
of Directors, ST-Ericsson said: "I welcome Carlo Ferro as the new
President and CEO of ST-Ericsson. Carlo has over twenty years of
experience in the semiconductor
industry and a strong track record in
driving and managing complex tr
ansformation projects. He has been a
contributor to the solid progress ST-Ericsson has made the past year
in terms of strategy execution and significantly
"Ericsson continues to believe that the thin modems hold a strategic
the wireless industry. With this move Ericsson will create a
highly focused "thin modem only" operation - an area in which both
parents have invested significant amounts to establish industry
leading technology and Intellectual
Property," said Hans Vestberg.
"Initial customer contacts give support to the
belief that our modems
will meet the requirements of the manufacturers in the
growing smartphone and tablet market."
As previously communicated, Ericsson has made provisions of SEK -3.3
b. in 2012
which will cover costs related to the implementation of
the strategic option.
Once the multimode thin modem business has been
fully integrated into Ericsson
in Q4 the operation will be reported
as a standalone segment. Our current best
estimate is that it will
generate operating losses of approximately SEK 0.5 b.
in Q4, 2013,
primarily related to R&D expenses.
The thin modem technology developed within ST-Ericsson has evolved
into a unique
architecture for low power, highly integrated multimode
multi-band modems covering GSM/GPRS/EDGE, TD-SCDMA, HSPA+, LTE
(TDD/FDD), LTE-Advanced, the widest
array of frequency bands and a
feature set that includes Single RF Chip Carrier
An LTE/HSPA+/3G/2G modem based on this evolved architecture was
recently demonstrated at Mobile World Congress in Barcelona and has
received its first
global operator certification.
CONFERENCE CALL FOR ANALYSTS, INVESTORS AND MEDIA
The conference call for financial analysts, investors and media will
14:00 CET (13:00 UK time, 09:00 Eastern Daylight Time in the
US, and 22:00 local
time in Japan). CFO Jan Frykhammar and Chief
Strategist Douglas Gilstrap, will
comment on the announcement and
Sweden: +46 8 505 202 70 (toll free Sweden: 0200-125 785)
International/UK: +44 208 817 93 01 (UK free phone 0800 634 5205)
US: +1 718 354 12 26
Confirmation number: 10287746
(Participants will have to enter the confirmation number when dialing
Please call in at least 15 minutes before the conference call begins.
are usually a large number of callers, it may take some time
before you are connected.
A live audio webcast of the conference call will be available at
www.ericsson.com/investors and www.ericsson.com/press.
NOTES TO EDITORS
Download high-resolution photos and broadcast-quality video at
Ericsson is a world-leading provider of communications technology and
We are enabling the Networked Society with efficient
real-time solutions that
allow us all to study, work and live our
lives more freely, in sustainable societies around the world.
Our offering comprises services, software and infrastructure within
and Communications Technology for telecom operators and
other industries. Today
40 percent of the world's mobile traffic goes
through Ericsson networks and we
support customers' networks
servicing more than 2.5 billion subscriptions.
We are more than 110,000 people working with customers in more than
180 countries. Founded in 1876, Ericsson is headquartered in
Stockholm, Sweden. In
2012 the company's net sales were SEK 227.8
billion (USD 33.8 billion). Ericsson
is listed on NASDAQ OMX,
Stockholm and NASDAQ, New York stock exchanges.
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Ericsson via Thomson Reuters ONE
FOR FURTHER INFORMATION, PLEASE CONTACT
Ericsson Corporate Communications
Phone: +46 10 719 69 92
Ericsson Investor Relations
Phone: +46 10 719 00 00
Press spacebar to pause and continue. Press esc to stop.