Sony buys out Sony Ericsson for €1.05bn

Oct 27, 2011
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Sony has bought out Ericsson's stake in Sony Ericsson, giving the Japanese company sole control over the smartphone manufacturer. The deal, worth €1.05bn ($1.47bn) in cash to Ericsson, will see Sony bring the smartphone business in under its networked consumer electronics umbrella, a shift which the company describes as "a logical strategic step that takes into account the nature of [the mobile market] evolution and its impact on the marketplace."

Sony's intention had been leaked earlier this month, with the deal then tipped to be worth between $1.3bn and $1.7bn for Ericsson. The two companies will continue to work together, planning to set up a joint initiative designed to promote wireless connectivity. However, Ericsson's overall "focus is on the global wireless market as a whole" Sony says.

"The transaction gives Sony an opportunity to rapidly integrate smartphones into its broad array of network-connected consumer electronics devices – including tablets, televisions and personal computers - for the benefit of consumers and the growth of its business. 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" Sony

Meanwhile, the buy-out gives Sony a valuable haul of patents, handy things to have when the smartphone and tablet market is embroiled in legal sparring over which company invented what. Although the exact patents involved aren't detailed, Sony describes it as "a broad IP cross-licensing agreement and ownership of five essential patent families."

"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. This includes Sony’s own acclaimed network services, like the PlayStation Network and Sony Entertainment Network" Sir Howard Stringer, Chairman, Chief Executive Officer and President, Sony

The acquisition is expected to close in January 2012, subject to relevant approvals. Sony Ericsson had previously announced that its 2012 focus is to be smartphones.


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