Sony close to purchasing Ericsson's share of handset JV

Sony is close to finalising a deal to purchase Ericsson's 50 per cent share in the Sony Ericsson handset joint venture, according to a Reuters report. Negotiations are said to have been underway for some weeks. 

Sony is reportedly pushing Ericsson for a deal because the Japanese consumer electronics giant is keen to gain total control of the venture with the aim of integrating the smartphone business with its PC, tablet and hand-held game products.

Analysts estimate that Ericsson's 50 per cent holding in the venture is valued between €1 billion and €1.25 billion. However, the Wall Street Journal reports that the amount Sony may have to pay Ericsson is uncertain due to the valuation Ericsson might place on any patents being transferred as part of the sale.

"A buy-out would make a lot of sense for Ericsson as I believe their share in the JV is worth to them between zero and minus €1 billion. Whatever price they agree on, it would be a positive for Ericsson," Bernstein analyst Pierre Ferragu told Reuters.

Sony is keen to close the deal so it can better compete against smartphone heavyweights such as Apple and Samsung. Both of those firms have gained huge market share by closely coupling their smartphone and tablet strategies.

Sony Ericsson CEO Bert Nordberg, who took over management of the JV in 2009, has adopted a policy of building closer ties with the Japanese company, and recently said that the company had "more in common" with Sony than Ericsson. Likewise, Sony CEO Howard Stringer is said to be ready to settle the future of the JV as soon as possible.

For more:
- see this WSJ article (sub. req.)
- see this Reuters article

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