Ericsson and STMicroelectronics to Split Up Joint Venture

Ericsson and STMicroelectronics agreed to split up their joint venture, ST-Ericsson. Key points:

• Ericsson will take on the design, development and sales of the LTE multimode thin modem products, including 2G, 3G and 4G multimode
• ST will take on the existing ST-Ericsson products, other than LTE multimode 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 parent companies 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 approximately 1,800 employees and contractors, with the largest concentrations in Sweden, Germany, India and China.
• It is also proposed that ST will assume approximately 950 employees, primarily in France and in Italy, to support ongoing business and new products development within ST.
• Approximately 1,600 employees worldwide will lose their jobs in the restructuring.  This includes about 500-700 positions in Europe, including 400 to 600 positions in Sweden and 50 to 80 positions in Germany.
• Carlo Ferro has been appointed President and CEO of ST-Ericsson to carry out the transition phase.

"Ericsson continues to believe that the thin modems hold a strategic value to 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, President and CEO, Ericsson and Chairman of the Board of Directors.

http://www.ericsson.com
http://www.stericsson.com