Sony Corp will buy out its partner Ericsson's stake in their mobile phone equal joint venture Sony Ericsson, for $1.47 billion, both companies yesterday said.
The acquisition will enable Sony to acquire Ericsson's 50-per cent stake in the joint venture as well as the five wireless technology ''patent families.'' The two companies have also entered into a cross-licensing agreement for their intellectual property.
As part of the acquisition, Ericsson will receive a $1.47 billion in cash from Sony, while the Tokyo-based company will now be able to incorporate its mobile products into its other electronics offerings like PCs, TVs and tablets and laptops, which the company says is ''a logical strategic step that takes into account the nature of the mobile market evolution and its impact on the marketplace.''
The two companies said that they will continue to work together, and set up a joint initiative designed to promote wireless connectivity. However, Ericsson's overall ''focus is on the global wireless market as a whole.''
"With a vibrant smartphone business and by gaining access to important strategic IP, notably a broad cross-license agreement, our four-screen strategy is in place. We can more rapidly and more widely offer consumers smartphones, laptops, tablets and televisions that seamlessly connect with one another and open up new worlds of online entertainment,'' said Sir Howard Stringer, Sony's chairman, CEO and president.
Stringer also said that the acquisition would afford Sony operational efficiencies in engineering, network development and marketing, among other areas. "We can help people enjoy all our content - from movies to music and games - through our many devices, in a way no one else can."