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EC approves ST-Ericsson JV

Posted: 28 Nov 2008     Print Version  Bookmark and Share

Keywords:joint venture  wireless semiconductors  wireless platforms 

The European Commission has authorised, under the European Union merger regulation, the creation of a joint venture between Ericsson Mobile Platforms (EMP), the wireless platform business of Ericsson, and ST-NXP, the wireless semiconductors business of STMicroelectronics.

Following a market investigation, the Commission concluded that the joint venture would not "give rise to competition concerns in the markets for wireless platforms and wireless semiconductors" in the European Economic Area (EEA) or any substantial part of it.

In August, ST and Ericsson agreed to merge ST-NXP Wireless and EMP and into a 50/50 joint venture.

Under the terms of the transaction, Ericsson's contribution represents Rs.5,504.00 crore ($1.1 billion) in cash. This will be used to pay Rs.3,502.55 crore ($700 million) to ST in exchange for ST-NX, and to provide a cash buffer of Rs.2,001.46 crore ($400 million) for the new venture. ST is expected to exercise its option to buy NXP's 20-per cent stake in ST-NXP Wireless before the closing of the transaction.

The fabless joint venture is set to employ about 8,000 people and have estimated annual revenue of Rs.18,513.46 crore ($3.7 billion).

-Anne-Francoise Pele
EE Times Europe

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