ST-Ericsson split finalized, winding down begins
Ericsson and STMicroelectronics have completed the formal transfer and split of the failed joint venture ST-Ericsson.
In an announcement Monday, Ericsson said that the transfer of assets and business segments to each parent company is now complete, and the two firms have now begun closing down the "remaining activities" of the joint venture.
The announcement follows the March 18 2013 announcement that the networking company would be split between the two 50-50 shareholders. Ericsson will take on the design, development and sales of LTE multimode thin modem solutions, including 2G, 3G and 4G. As a result, roughly 1,800 ST-Ericsson employees have now joined the tech giant.
Douglas Gilstrap, Senior Vice President and Chief Strategist at Ericsson said:
"We welcome the team of about 1,800 modem-experts that join Ericsson. Ericsson continues to see great value in the LTE multimode thin modems as they are an important part of our vision of 50 billion connected devices in a Networked Society. The market potential is there and Ericsson will now focus on bringing the best modems to market, and work closely with customers to integrate them into their products."
STMicroelectronics has agreed to take on all remaining products not related to LTE technology, including a number of assembly and test facilities. Approximately 1,000 members of staff will join the industrial supplier, which means that roughly 1,600 jobs are expected to be axed in total.
The failed firm's navigation satellite system (GNSS) business, including receivers that interact with GPS technology and GLONASS -- a radio-based satellite navigation system operated by Russian defense forces -- has been sold to an undisclosed third party, with no information disclosed beyond being a "leading semiconductor company."
The wind-down of the joint venture began after a three-month hunt for a prospective buyer failed. The networking company, launched in 2009, has accumulated almost three billion dollars in net losses since its launch.