Ericsson and STMicroelectronics have completed a merger that will create the world leader in semiconductors and platforms for mobile applications.
February 3, 2009, 08:03 (CET)STMicroelectronics (NYSE:STM) and Ericsson (NASDAQ:ERIC) today announced the closing of their agreement merging Ericsson Mobile Platforms and ST-NXP Wireless into a 50/50 joint venture. The deal was completed on the terms originally announced on August 20, 2008. The new company is designed for long-term stability and is set to become an industry leader in product research, as well as design, development, and the creation of cutting-edge mobile platforms and wireless semiconductors. The JV begins as a major supplier to four of the industry's top five handset manufacturers, who together represent about 80 percent of global handset shipments, as well as to other exciting industry leaders. Ericsson contributed USD 1.1 billion net to the joint venture, out of which USD 0.7 billion was paid to ST. Prior to the closing of the transaction, ST exercised its option to buyout NXP's 20 percent ownership stake of ST-NXP Wireless. Alain Dutheil, presently CEO of ST-NXP Wireless and Chief Operating Officer of STMicroelectronics, will lead the joint venture as President and Chief Executive Officer. Governance is balanced. Each parent appoints four directors to the board with Carl-Henric Svanberg, President and CEO of Ericsson, as the Chairman of the Board and Carlo Bozotti, President and CEO of STMicroelectronics, as the Vice Chairman. Employing about 8,000 people - roughly 3,000 from Ericsson and approximately 5,000 from ST - the new global leader in wireless technologies is headquartered in Geneva, Switzerland. The new company will meet its customers at the Mobile World Congress in Barcelona from Feb 16 to Feb 19.