Swedish mobile networking equipment giant Ericsson has raised its ownership stake in the LG-Ericsson joint venture from 50 percent to 75 percent as it looks to further strengthen its position in the South Korean market.
In a statement Thursday, Ericsson said it acquired the additional shares in LG-Ericsson but did not disclose any financial details.
"We are very happy with the investment and our position in the Korean market, and that's the rationale for increasing the stake," Ericsson spokesperson Tobias Gyhlenius told Bloomberg in its report, but declined to reveal the purchase price.
"Korea is one of the top telecom markets globally so it's a good market to be in," said Haakan Wranne, a Stockholm-based analyst at Swedbank Markets, in the report. Ericsson had previously bought then-bankrupt Nortel Networks' share of LG-Nortel in 2010 for US$242 million. Back then, it said the acquisition would significantly expand Ericsson's footprint in the Korean market, noting that the LG-Ericsson joint venture included contracts with Korean operators such as KT, LG Telecom and SK Telecom.
Another report by Reuters said Ericsson is cash-rich from selling Sony its stake in the Sony Ericsson joint venture, adding that analysts predict the Swedish company will also likely sell its other stake in ST-Ericsson microchip joint venture.