Report: Ericsson, STMicro fail to find buyer for ST-Ericsson venture
Ericsson (NASDAQ:ERIC) and STMicroelectronics have tried and failed over the past three months to find a buyer for their struggling ST-Ericsson chipset joint venture, according to a Bloomberg report.
The report, citing six unnamed sources familiar with the matter, said the parent companies may decide to wind down the venture. The companies approached other firms, including Samsung Electronics, which ultimately decided to pass on buying ST-Ericsson.
Representatives from Ericsson, STMicroelectronics and Samsung declined to comment, according to Bloomberg.
The report comes just days after ST-Ericsson said that CEO Didier Lamouche, its third CEO in as many years, will step down at the end of the month to pursue other opportunities. ST-Ericsson did not name a successor and declined to comment beyond a brief statement. ST-Ericsson has racked up $2.7 billion in net losses since 2009, according to Bloomberg.
Ericsson has said it will explore "various strategic options" for ST-Ericsson's assets. The chip vendor's parent companies have hired JP Morgan to advise them on what to do. Ericsson has repeatedly said that the modem technology it contributed to the joint venture has a strategic value to the wireless industry. During the Mobile World Congress trade show last month ST-Ericsson unveiled its Thor M7450 LTE Advanced modem and said that the chip was sampling with customers.
Ericsson took a $1.2 billion charge in the fourth quarter related to ST-Ericsson. STMicroelectronics said in December it will sell off its stake in ST-Ericsson, a transaction it expects to complete during the third quarter of 2013.
Under Lamouche, ST-Ericsson said last April it would cut 1,700 jobs and transfer the development of its standalone applications processor business to STMicro in a bid to change its strategic direction. According to Strategy Analytics' latest report on the global baseband chipset market, ST-Ericsson was No. 5 in terms of revenue share in 2012, behind Qualcomm (NASDAQ:QCOM), MediaTek, Intel and Broadcom.
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