ST-Ericsson, a 50-50 joint venture of semiconductor developer STMicroelectronics and communications equipment vendor Ericsson, has agreed to sell the assets and intellectual property rights associated with its mobile connectivity Global Navigation…
ST-Ericsson, a 50-50 joint venture of semiconductor developer STMicroelectronics and communications equipment vendor Ericsson, has agreed to sell the assets and intellectual property rights associated with its mobile connectivity Global Navigation Satellite System (GNSS) business to technology giant Intel.
While financial details have not been disclosed, STM stated that proceeds from the sale, combined with the avoidance of employee restructuring charges and other related restructuring costs, would reduce the joint venture’s cash needs by approximately US$90m.
In addition to the assets and IPR associated with this business, Intel will acquire a team of 130 industry veterans located in UK, India and Singapore. The closing of the transaction expected to be completed in August, 2013.
The sale is a central part of the wider plan announced by STM and Ericsson back in March to break up the joint venture. Under the restructuring, Ericsson has taken on the design, development and sales of the LTE multimode thin modem products, while ST will retain all the other existing ST-Ericsson products.
Their decision to exit comes after a review was launched late last year to explore strategic alternatives for the loss making venture, which has struggled to compete with rivals in Asia.
JP Morgan is believed to have advised the companies on options for the joint venture.
