Money Matters - Simplified

Sony launches new brand, buys Ericsson’s shares

Sony has acquired Ericsson’s shares for US $ 1.47 billion to launch its new brand Sony Mobile Communications headed by Bert Nordberg.

Sony has acquired Ericsson’s shares for US $ 1.47 billion to launch its new brand Sony Mobile Communications which replaces a well established brand Sony Ericsson in the market.

Sony was looking to acquire the Swedish company’s shares from quite some time but the deal only went through last month after European Commission gave its approval.

The buyout ended a decade long partnership between the Japanese and Swedish handheld manufacturers.

The deal
With the US $ 1.47 billion deal, Sony not only purchased Ericsson’s 50 percent stake but also gained ownership of mobile phone patents and other patent rights through a cross-license deal with Ericsson.

Acquisition of five wireless patents enables Sony to expand its mobile phone business which has been a vital element of its electronic business. Sony is looking to become a firm focusing on Smartphones instead of feature phones.

The newly formed Sony Mobile Communications will be able to accelerate the convergence of its electronic products like tables, TVs, PCs and Smartphones. Additionally, the deal will also integrate Sony’s mobile phones and Gaming consoles.

The buyout ended a decade long partnership between the Japanese and Swedish handheld manufacturers.

Sony’s reaction
Revealing its plans, Sony Mobile Communications said the company is looking to combine its mobile phone with the existing products which are a vital element of its electronic business.

In a statement Sony Mobile Communications said that it plans to “integrate the mobile phone business as a vital element of its electronics business, with the aim of accelerating convergence between Sony’s lineups of network enabled consumer electronics products, including smart phones, tablets, TVs and PCs.”

Sony Mobile Communications
Sony Mobile Communications will be based in London just like Sony Ericsson was earlier.

Bert Nordberg who has been president of Sony Ericsson since 2004 and chief executive since 2009, will continue as president and the CEO of the newly formed brand.

Meanwhile, Nordberg was also contacted by Vestas Wind Systems in Denmark to take over Chairman’s role later this year but it is unlikely that he will be stepping down from Sony.