Home & Office

The hunt for ST-Ericsson venture buyer fails

STMicro and Ericsson's joint venture has raised little interest from investors, it seems.
Written by Charlie Osborne, Contributing Writer

The joint venture between STMicroelectronics and Ericsson has not been an attractive prospect to investors, as both firms fail to find a buyer.

The three-month search to offload the ailing wireless chip business has met with nothing, Bloomberg reports. Citing sources "close to the situation," the publication says that even though potential buyers were approached -- including South Korean firm Samsung -- attempts to find a purchaser have fallen short, and the two companies are considering winding down the venture as an alternative option, something which could prove costly to the electronics makers.

Both firms would ideally like to exit from the equal partnership by the third quarter, especially as ST-Ericsson's CEO Didier Lamouche resigned this week to move on to greener pastures -- without naming a successor. However, considering the joint venture's current state of affairs, this could be an overly-optimistic goal.

ST-Ericsson, launched in 2009, has consistently lost value after the telecoms equipment maker focused on LTE products but failed to become competitive enough in today's marketplace. After conducting a strategic review of the JV in October, STMicro announced its intentions to withdraw as a shareholder at the end of last year.

Ericsson believes that the joint venture does have "strategic importance" in the wireless industry, and the firm's assets would be a valuable addition to another company. However, the 50-percent stakeholder still did not manage to avoid the financial burden ST-Ericsson has caused -- as it recently stated Q4 results would result in a $1.2 billion charge due to the company's failure.

Editorial standards