Ericsson and STMicroelectronics have announced an agreement on the future of their ST-Ericsson mobile technology joint venture. Last year ST revealed that it wanted to leave the 50/50 partnership.
ST-Ericsson will be divided between the two partners, with Ericsson taking on design, development and sales of LTE multimode thin modem products and ST taking on the remaining ST-Ericsson products and related business. The transfer is expected to be completed this autumn, subject to regulatory approval. Around 1,800 employees and contractors will move to Ericsson and approximately 950 employees will transfer to STMicroelectronics. ST Ericsson says it’ll carry out restructuring of its current operations, which could affect approximately 1,600 employees worldwide.
Carlo Ferro, currently Chief Operating Officer of ST-Ericsson, will take over from departing CEO Didier Lamouche for the transition.
Carlo Bozotti, President and CEO of ST, said “In line with what we announced in December last year, we have now moved to the next step of our exit process and found a solution with Ericsson that fully aligns with our new strategy. The agreement made with Ericsson represents a major step forward in reaching our new financial model target and allows us to further strengthen the skillsets of our company, by welcoming in ST, at completion, additional strong competences to fuel growth in specific key product areas. Moreover, it protects and leverages the ongoing ST-Ericsson’s business, allowing us to reinforce our relationships with key customers, both of ST and of ST-Ericsson”.