Sony to buy mobile venture in €1bn deal

Sony is to buy Ericsson's 50 per cent stake of its joint mobile phone venture for just over €1 billion in cash, it was announced this morning.

Under the deal, Sony Ericsson will become a wholly-owned subsidiary of Sony, giving the electronics firm ownership of vital patents and a broad intellectual property cross-licensing agreement covering Sony products and services.

Sony said the deal was "a logical strategic step" that took into account the shift in focus of the mobile market from simple handsets to smartphones with access to rich content.

"This acquisition makes sense for Sony and Ericsson, and it will make the difference for consumers, who want to connect with content wherever they are, whenever they want," said Sony chief executive Howard Stringer, adding that the company's "four-screen strategy" was in place.

"We can more rapidly and more widely offer consumers smartphones, laptops, tablets and televisions that seamlessly connect with one another and open up new worlds of online entertainment."

Sony expects a number of efficiencies from the deal across engineering, network development and marketing, among other areas. The deal is expected to close in January 2012, and must be approved by regulators first.

Ericsson chief executive Hans Vestberg said it would now focus on enabling connectivity for all devices.

The Sony Ericsson venture was established in October 2001, combining the unprofitable handset operations from both firms. The company now makes a number of handsets using Google's Android operating system, and has an 11 per cent share of that market by value.