It's Official: Sony Acquiring Ericsson's Share in Phones

Sony Ericsson are now just Sony.

Thursday Sony Ericsson said that Sony has agreed to acquire Ericsson's 50-percent stake in the joint Sony Ericsson Mobile Communications AB venture. The mobile handset business will now be a wholly-owned subsidiary of the Sony collective. As part of the transaction, Ericsson will receive a cash consideration of EUR 1.05 billion. Not too shabby.

The acquisition makes sense: Sony can now rapidly integrate smartphones into its network of connected devices including tablets, televisions, laptops and gaming consoles. And as Sony states in a press release, the transaction also provides the company 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."

Essentially with smartphones in-house, Sony will be able to roll out its media services including movies, music and games that will be accessible to all Sony devices. Back in August the company unified its online media services into the Sony Entertainment Network, a move that Kazuo Hirai, president of Sony's consumer products and services group, said would "accelerate the integration of hardware, content, and network."

Thus, the launch SEN was just part of the company's overall four-screen strategy: tablet, PC, TV and now smartphones.

"This acquisition makes sense for Sony and Ericsson, and it will make the difference for consumers, who want to connect with content wherever they are, whenever they want," said Sir Howard Stringer, Sony’s Chairman, Chief Executive Officer and President. "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."

Stringer also noted that the acquisition will 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," he said.

The transaction, which has been approved by appropriate decision-making bodies of both companies, is expected to close in January 2012, subject to customary closing conditions, including regulatory approvals. The transaction will result in a positive capital gain for Ericsson which will be defined after closing of the transaction.